Morrisons counts the cost of the coronavirus crisis

The Bradford-based firm said pre-tax profits fell from £198m to £148m in the six months to August 2 after Covid-19 direct net costs of £62m.

David Potts, chief executive, said: “From the start of the pandemic we stepped up and put the company’s assets at the disposal of the country to help feed the nation.

“Morrisons is at the heart of local communities and responded quickly when it mattered most, and we are very grateful for the British public’s appreciation of all the vital work our colleagues are doing. I believe we are seeing the renaissance of British supermarkets.

“I’d like to again thank every Morrisons colleague for their incredible efforts: you’ve earned your key worker status several times over.”

Like-for-like sales rose 8.7 per cent as the pandemic drove demand. However, the group booked £155m in Covid costs, which was partly mitigated by a £93m reduction in business rates.

Mr Potts said the group is planning for profit growth in the second half amid strong grocery sales. Morrisons expanded its home delivery capacity “five-fold” after the coronavirus crisis sparked demand for deliveries.

Last month, it launched a same day delivery service called ‘Morrisons on Amazon’ with a trial in Leeds.

“We are pleased with the Amazon trial in Leeds,” said Mr Potts.

“There has been a tick up in sales since ‘Morrisons on Amazon’ became part of the main Amazon site. It means when you get on to that big site, you are seeing a shop front of Morrisons and it becomes easier and less clicks in order to get Morrisons Market Street.

“We’ve said that by the end of this year, that service will be across 50 stores. It gives access to the Morrisons brand to millions of Prime customers.”

Mr Potts said that Morrisons hopes that the Government can secure a tariff-free Brexit deal.

“From our point of view, representing British consumers, we’d like the Government and the leaders of the country to negotiate a deal that includes no tariffs,” he said.

“In the end, tariffs do drive inflation. Certainly in any year, no-one wants to see increased prices, but particularly in a recession year, we don’t either.

“We would very much like the focus to be on a no tariff deal.”

When asked by The Yorkshire Post how Morrisons would cope with a no deal Brexit, Mr Potts said: “Our job is to run Morrisons, not the country.

“Two thirds of what we sell is British so we think we are in a good position and, whilst we recognise there will be some delays at borders, we continue to look at alternatives to Dover/Calais.”

Earlier this week, Morrisons announced it was slashing the price of more than 400 of its most popular items to make good food affordable for families this autumn.

The firm said that with the UK now in recession and some family budgets under pressure, it will reduce the prices of the 400 essentials by an average of 23 per cent.

Mr Potts said that Morrisons shoppers will see their cheapest ever Christmas as a result of the permanent price cuts.

Analyst Clive Black at Shore Capital said: "The British supermarkets have been the heroes of the pandemic and none more so than Morrisons, with its wide-ranging support for society.

"CEO, David Potts, is clearly very proud of his team, and so he should be, with Morrisons in a much better place today than this time last year."