Takeover target Morrisons has warned over pressure on prices due to the mounting supply chain crisis as it revealed half-year profits tumbled 43%.
The chain – which is at the centre of a bidding battle between two US private equity firms – said it expects industry-wide retail price inflation in the coming months as a result of the lorry driver shortage, global commodity price increases and higher haulage costs.
But it said it would look to lessen the impact of the cost pressures and supply issues to keep its shelves stocked.
The comments came as it posted statutory pre-tax profits of £82m for the six months to August 1, down from £145m a year ago.
Underlying pre-tax profits fell 37% to £105m, with the group blaming a hit from £41m in pandemic-related costs, as well as £80m in lost profit across its cafes, petrol forecourts and food-to-go.
Morrisons said: “We expect some industry-wide retail price inflation during the second half, driven by sustained recent commodity price increases and freight inflation, and the current shortage of HGV drivers.
“We will seek to mitigate these and other potential cost increases, such as any incurred to maintain good on-shelf availability.”