Morrisons profits halve in Q3 as inflation pressures hit
Despite total revenue rising by 4.5% to £4.8bn, the group’s profit was hit by record inflation, rising interest rates and ‘unprecedented’ energy prices
Morrisons has seen its profits halve in its latest quarter, falling from £356m to £177m, with the group warning that consumer sentiment continues to be “very subdued”.
Despite total revenue rising by 4.5% to £4.8bn in the quarter ended 31 July, 2022, the group’s profit was hit by record inflation, rising interest rates and “unprecedented” energy prices, all of which have damaged customer shopping patterns.
The group added that during the period, it experienced “unprecedented” inflationary pressures in its own food manufacturing operations. It said that as a foodmaker it “feels the effects of inflation earlier than other retailers, but conversely are able to recover more quickly when inflation falls”.
Despite its latest results, the group said it has exited the quarter in a stronger position, with good momentum, and anticipates this continuing into Q4.
David Potts, Morrisons CEO, said: “It’s clear that the cost of living crisis is starting to change customer shopping patterns in many ways. The speed, scale and severity of cost and energy price increases, exacerbated by the terrible war in Ukraine, had significant impacts through the quarter, but the market is still growing and the energy price guarantee will ease pressure on consumers.
“We are doing everything we can to keep prices down for customers. Last quarter we introduced one of our biggest ever price cut campaigns and in Q3 we introduced our popular Summer Collector scheme. Earlier this week we announced another significant price cut programme across 150 of our most popular products and tomorrow we are launching a timely fuel promotion – with 5p a litre off with a £40 spend in store – to help customers with the high cost of motoring.”
He added: “Importantly, we are adjusting and adapting, with ongoing investment in our customer proposition including exciting plans for McColl’s which we’re confident will continue to grow our convenience offering and footprint. We are also improving our digital capabilities and investing strongly in our My Morrisons card and app, helping us to incentivise and reward our customers in a more personalised and targeted way.
“I want to thank all Morrisons colleagues for their continued hard work and dedication to helping our customers through an exceptionally difficult period for UK consumers. They continue to be a beacon of compassion and consideration – and the affection and appreciation that our customers have for their work is evident every day.”
