Morrisons has blamed the cost-of-living crisis and rising household bills for changing consumer behaviour and impacting on spend as it revealed that its earnings were cut in half over the past quarter.
The supermarket group posted adjusted earnings of £177 million over the 13-week period to July 31, compared with £356 million over the same period last year. It said that profitability had been impacted by weaker grocery sales in the face of “very subdued” consumer sentiment.
Morrisons, which was bought by US private equity firm Clayton, Dubilier & Rice for £7 billion last year, said that group like-for-like sales, excluding fuel, fell by 3.1% over the third quarter, to £4.78 billion.
Morrisons chief executive David Potts 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,” he added.
The retailer also announced earlier this week that it is cutting prices among 150 of its most popular items as it seeks to address customer concerns regarding inflation.
Potts also added that Morrisons is “doing everything we can” to keep prices down during what is proving to be “an exceptionally difficult period for UK consumers.”