Morrisons profits hit £935 million

Morrisons has unveiled profits of �935 million.
Morrisons has unveiled profits of �935 million.
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The UK’s fourth biggest supermarket Morrisons boasted success in a price war with its rivals today as it reported a better-than-expected rise in annual profits.

Dalton Philips, Morrisons chief executive, said its budget M Savers range had received a strong response and the supermarket offered ‘promotions that customers understood’.

Tesco sparked a battle with its competitors last September when it unveiled the Big Price Drop campaign, prompting Sainsbury’s, Asda and Morrisons to follow suit.

Morrisons, which has 455 stores in the UK, recorded an 8 per cent rise in underlying pre-tax profits to £935 million in the year to January 29, as like-for-like sales excluding fuel and VAT rose by 1.8 per cent. The City had been expecting profits of around £922 million.

Looking ahead, Mr Philips, who took over when Marc Bolland joined Marks & Spencer, said: “We know that 2012 will be tough, and we will be working hard to deliver even better value for our customers.”

The group plans to spend about £1.7 million per store on revamping the supermarket’s fresh food offering, after a successful trial in 12 stores in the UK.

The grocer said its store-opening plans were on track with 700,000 sq feet of space set to be opened in the current financial year, compared with 643,000 sq feet in the last year, or 37 new stores.

This will include new convenience formats - M Local - which have an average size of about 8,000 sq feet.

Morrisons has a string of stores across South Yorkshire, including Hillsborough, Meadowhead, Catcliffe, Ecclesfield and Halfway in Sheffield, as well as Rotherham, Bramley, Brampton, Doncaster and Armthorpe.