Morrisons to open smaller shops

9th Sep 2010 07:03

Supermarket Morrisons posted profits broadly in line with expectations for the six months to August 1 and unveiled a move into the convenience store market as new chief executive Dalton Philips makes his mark on the company.Pre-tax profits totalled £412m, down from £449m over the same period the previous year when they were boosted by an exceptional credit. Revenues climbed to £8.1bn from £7.5bn, a rise of 9%. Like for like sales were up by 0.9%.With the market likely to be tough amid pressures on the consumer, Morrisons is to begin a trial period of operating convenience stores in the first half of 2011. It is also assessing a move into online grocery retailing.'At a time when value is a priority for everyone we have continued our run of market beating sales growth, attracting more customers to Morrisons than ever before, reflecting our broad appeal,' said chairman Sir Ian Gibson. 'Our new CEO, Dalton Philips, has made a great start in the business and with the leadership team is developing positive plans for the next phase of growth for Morrisons.'Morrisons said it expects low growth in the supermarket to continue into the second half of the year as the consumer remains under pressure.Prices are likely to rise in coming months due to commodity price pressures, the supermarket said, pointing out that soaring wheat prices recently will push up bread prices and later protein prices due to wheat's use as an animal feed ingredient.Aside from Dalton's plans to run trials of convenience stores as he makes his mark on the business the new boss's strategy involves a focus on powerful own-label brands, emphasis on fresh foods and efforts to improve customer service.Morrisons said its core business of operating grocery stores from 10,000 to 40,000 square feet of retail space remains attractive, with good long term growth prospects.