Morrisons meets forecasts

Supermarket Morrisons has said its value ranges had helped it bring in half a million more customers every week as hard-pressed shoppers looked to cut food bills.

The firm, which relaunched cheaper lines and slashed prices on several everyday items to 50p, said like-for-like sales excluding fuel rose 7.6 per cent in the 26 weeks to August 3.

This improves on the 7 per cent growth seen in the first quarter, as shoppers looked harder to find the better deals amid fierce competition in the sector.

Morrisons said: "During the period the slowdown in the economy inevitably led to a focus on value."

Underlying profits at the UK's fourth biggest chain rose 19 per cent to £295 million in the first half, in line with City forecasts.

Morrisons and Asda - as well as discounters such as Aldi and Lidl - have been the main beneficiaries so far as shoppers are squeezed by rising bills.

The Bradford-based chain's promotional activity comes despite increasing pressure on supermarkets from soaring raw materials costs.

Morrisons said that as of the end of July, the cost of crude oil was 66 per cent above a year earlier, wheat was up 23 per cent and rice prices had more than doubled.

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