Morrisons quarterly profits halved amid UK consumer slump

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  • Q3 core profit stg 177 million, down from stg 356 million
  • Underlying sales down 3.1%
  • The group has lost its status as the UK’s No. 4 grocer to Aldi

LONDON, Sept 28 (Reuters) – British supermarket group Morrisons on Wednesday reported a halving of core third-quarter profits as underlying sales fell 3.1% amid a cost squeeze of life.

The group, which has been owned by US private equity firm Clayton, Dubilier & Rice for nearly a year, said base profits were 177 million pounds ($189 million) in the 13 weeks to on July 31, compared to 356 million pounds during the same period. Last year.

Morrisons said the drop reflected “a number of temporary and transitory factors”, some of which expected to reverse in the fourth quarter, and a year-end change.

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The group differs from its main rivals in that it also has its own manufacturing operations, which also experienced unprecedented inflationary pressures during the period under review.

“It’s clear that the cost of living crisis is starting to change customer buying habits in many ways,” chief executive David Potts said.

“The speed, scale and severity of increases in energy costs and prices, exacerbated by the terrible war in Ukraine, had significant impacts throughout the quarter.”

Monthly industry data has consistently shown Morrisons underperforming rivals, including market leader Tesco (TSCO.L) and No.2 Sainsbury’s (SBRY.L), and this month the group lost its status as the country’s fourth largest grocer to a German company. Aldi discounter.

On Monday, Aldi announced a 79% drop in profits in 2021.

Britain’s consumer confidence levels hit a record high this month as they battle the accelerating cost of living, even before the government’s mini budget on Friday wreaked havoc on the mortgage market, resulting in warnings of a sharp fall in house prices.

Morrisons said on Tuesday that chief operating officer Trevor Strain was leaving the company.

($1 = 0.9370 pounds)

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Reporting by James Davey Editing by David Goodman

Our standards: The Thomson Reuters Trust Principles.

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