Strong sales boost Morrisons interim profits

Morrisons has announced that pre-tax profits during the first half of this year were up by 12.8% on last year to £309m, following strong sales growth.

The company’s interim results for the 26 weeks to 3 August showed that total turnover was up 13.5% on 2007/08 to £7.1bn and underlying profit before tax was up 18.5% to £295m.

Like for like sales (excluding fuel) were up 7.6%, while fuel sales alone increased by 31.6%. Customer numbers were also well up on the same time last year, with another 0.5m customers in stores per week – equivalent to a 4.7% increase.

“To have grown like for like sales by 7.6% in this economic climate is a clear testament to the strength of Morrisons’ recovery,” chief executive, Marc Bolland said. “More shoppers are choosing Morrisons because of our price-crunching deals and our unrivalled fresh offer in store.”

The supermarket said that although underlying producer costs had increased (see below), it had not passed these fully onto consumers. It expected the second half of 2008 to be highly competitive as disposable incomes came under further pressure, but it was keen to remain in a “strong competitive position”.

Raw material price increases (to 31 July) compared with one year ago:

• Crude oil 66%
• Wheat 23%
• Rice 119%
• Beef 27%
• Lamb 32%