Morrisons said this morning (11 September) that its value ranges helped to drive like-for-like sales gains as consumers looked to cut spending during the economic downturn.
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Comparable sales at the UK supermarket operator rose 7.6% in the 26 weeks to 3 August. During the period, the company relaunched cheaper lines and cut prices on a number of everyday items.
“During the period the slowdown in the economy inevitably led to a focus on value,” Morrisons said.
Underlying profits at the UK’s number four supermarket chain rose 19% to GBP295m (US$514.9m) in the first half of 2008, in line with forecasts.
The company said that the rise in profits was achieved despite climbing raw material costs. Morrisons said the competitive landscape of the UK grocery sector meant that it had been unable to pass increased costs onto consumers in the half. The cost of crude oil was up 66% on last year, while wheat was up 23% and the cost of rice had more than doubled.
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By GlobalData“We fully expect the second half to be highly competitive as disposable incomes come under further pressure, and we will continue to use our sales momentum to fund price investment and maintain a strong competitive position,” the group said.
During the half, Morrisons completed the rebranding of its stores as part of a recovery programme under chief executive Marc Bolland.
“To have grown like-for-like sales by 7.6% in this economic climate is a clear testament to the strength of Morrisons recovery. More shoppers are choosing Morrisons because of our price-crunching deals and our unrivalled fresh offer in store,” Bolland said.
