// Morrisons warns of “industry-wide” price rises
// It posted a 43% drop in profits in its half-year results
// Morrisons said it expects to help “mitigate” the increase in costs
Morrisons has warned it expects to see “industry-wide” price rises after posting a 43 per cent drop in profits for its half-year results.
The grocer, which is at the centre of a bidding war, said the price rises were to be “driven by sustained recent commodity price increases and freight inflation, and the current shortage of HGV drivers”.
Despite this, Morrisons expected to help “mitigate” the increase in costs, signalling that the continuing price war in the sector will limit higher prices at tills as the Big 4 grocers face competition from discounters Aldi and Lidl.
Profits over the first half of its financial year to August 1 were damaged by further Covid-19 costs totalling £41 million.
It reported £80 million of lost earnings from its cafés, fuel and food-to-go as pandemic measures bit and demand remained constrained.
The firm’s bottom line statutory profit before tax figure came in at £82 million, compared to £145 million in the same six-month period last year, as a result.
Total sales rose by almost four per cent to £9.1 billion during the period thanks to a rise in online sales during the pandemic and its wholesale business.
Morrisons said that online like-for-like sales growth was up 48 per cent but overall like-for like sales growth, excluding fuel, declined slightly by 0.3 per cent due to competition in the sector.