Grocer Morrisons notches up seven consecutive quarters of sales growth

● Recovery under chief executive David Potts continues despite sector price war

Morrisons has reported rising half-year profits as the supermarket chain hailed seven consecutive quarters of growing sales.

Pre-tax profits increased 39.9 per cent to £200 million in the six months to 30 July, while turnover rose 4.8 per cent to £8.42 billion. Secondquarter like-for-like sales grew by 2.6 per cent, while comparable sales over the first half as a whole rose 3 per cent.

Morrisons chief executive David Potts, who is overseeing a turnaround of the business, said: “A new Morrisons is beginning to take shape.

“The capability of the team continues to improve and we are making strong headway with our plans to fix, rebuild and grow.

“Our supermarkets continue their focus on improving the customer shopping trip and, in wholesale supply, we are beginning to realise some of the opportunities that our unique team of food makers and shopkeepers bring us.”

Potts has led a recovery of the grocery chain by investing in price cuts and calling time on under-performing stores in attempts to turn the page on the supermarket’s ill-fated era under ousted boss Dalton Philips.

In his latest attempt to reinvigorate the business, Morrisons said last month that it will relaunch the Safeway brand after striking a deal with Mccoll’s to supply the convenience store chain with groceries. The partnership will see the supermarket group, which has some 60 Scottish stores, supply Safeway and branded products to 1,300 convenience shops and 350 newsagents starting from January next year.

The move will help Morrisons secure wholesale sales of £700m including tobacco by the end of next year, with the amount rising to £1 billion.

Partly as a result of the deal, Morrisons has increased its profit guidance for the full year.

John Ibbotson, director of retail consultancy Retail Vision, said: “Morrisons has quitesimplybeentransformed over the past two years. Given the cut-throat market we’re in, this has been one of the great retail turnarounds.

“Dave Potts has kept his turnaround strategy simple and in the grocery world simple is generally best. By re-energising its food proposition and in putting customers first, Morrisons has regained their trust. This is another warning shot to the discounters, Aldi and Lidl.

“Crucially, Potts understands that Morrisons cannot now rest on its laurels but needs to build on the momentum it has achieved.”