Morrisons delivered some welcome good news for the retail sector this morning with a 9% jump in pre-tax profits.
Like-for-like sales for the six months to 31 July were up 2.2%, which Morrisons said was 0.8% ahead of the grocery market.
Pre-tax profits rose from £412m to £449m, with total sales hitting £8.7bn, up 7.4% from the £8.1bn for equivalent period last year.
Morrisons attracted a record 11.5m customers per week over the period. It said customers were responding to its value proposition – boosted by its Price Crunch campaigns and promotional offers on staples such as bread and milk for 50p and fruit and vegetables at 30p.
“In a tough economy shoppers are looking for unbeatable value on fresh food, great deals on national brands and the best prices at the pump,” said chief executive Dalton Philips.
“Our Price Crunch campaign has delivered these.”
Morrisons said it would next year roll out new concepts developed at its ‘Fresh Lab’ in Kirkstall, Leeds, and free up space for an extended fresh range, homeware and children’s clothing.
A major overhaul of its own label range is currently underway, with the first products expected to hit shelves next month.
The retailer has identified areas for improvement “where Morrisons was perceived to lack product range”. It cited ready meals as a key area for improvement, with a major range extension due in the third quarter of 2011.
Early results from its first foray into convenience retail with its M-local format were positive, Morrisons said, while plans to launch its Morrisons.com site for non-food next year were on schedule.
The website will be based on the platform from the Kiddicare business it bought earlier this year. The retailer is also set to roll out 28 Kiddicare kiosks in Morrisons stores by the end of the next quarter.
Meanwhile, Morrisons is continuing to work with FreshDirect in New York as it looks to develop a profitable online food business. It has appointed Simon Thompson as managing director for Morrisons.com for food.
The Grocer Cup: Who is your star of 2011? (6 August 2011)
Will Morrisons’ M-local be a convenience game-changer? (analysis; 16 July 2011)