Morrisons returns to profit

Morrisons has bagged a third consecutive quarter of like-for-like sales growth

The Bradford-based supermarket, which is returning to health under chief executive David Potts, said like-for-like sales rose 2 per cent in the second quarter, while pre-tax profit for the six months to July 31 rose 13.5 per cent to £143m - its first half year profit increase in four years.

Chairman Andrew Higginson said: "The new team has made a real difference and delivered further good progress across the board in the first half. Prices are lower, customers are being served better and quality is improving."

Turnover edged down 0.4 per cent to £8.03bn in the half year, with like-for-like sales up 1.4 per cent in the six months to July 31.

Morrisons CEO David Potts is returning the group to health

Mr Potts, who has embarked on a number of measures to reverse years of stagnation at the grocer, said he is planning more improvements.

James Grzinic, analyst at Jefferies, said: "We had pretty hefty expectations for Morrisons interims, and they were beaten across the board.

"Progress in laying the foundations has been strong in recent months given agreements with Timpson, Amazon and Ocado. We expect more news to emerge on this in the months to come."

Mr Potts has signed a new deal with Ocado and a landmark agreement with US online giant Amazon to supply fresh food to its customers.

The firm is slashing selected meat and poultry prices by 12 per cent.

All of the big four supermarkets, Tesco, Sainsbury's, Asda and Morrisons, have been cutting prices to compete with German discounters Aldi and Lidl, which have eroded their market share.