UK supermarket chain Wm Morrison has unveiled another strong set of financial results ahead of expectations, as it consistently betters rivals in terms of business growth.
The family-owned, no-frills, northern chain, the fifth largest supermarket retailer in the UK, posted a 15.3% increase in turnover to £1.97bn (US$2.87bn) for the first six months of 2001. Profits were up 14.1%, to £98.6m and growth in like-for-like takings was also promising at 7.7%.
Morrison invested £113m in price cuts during the period and analysts noted that its policy of cutting prices at the expense of margins was working well. The chain has no loyalty card schemes, home shopping network or offers for customers of financial services, but the period bought an extra 7.5m shoppers with an average basket size up 3.7%. Morrison is expected to invest a similar figure in reductions during H2.
John Dowd, Morrison’s managing director, commented that the firm has guaranteed success by focusing on groceries. During the second half of this year, it also plans to open stores outside its northern homeland.
Morrison’s shares remained true to form, outperforming supermarket peers. The Morrison family controls a 38% stake in the firm, and shares rose 7.25p to 208.25p, making the chain more expensive than sector leader Tesco.