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Morrisons has warned of “industry-wide” price rises after revealing a 43 percent drop in profits in its half-year results report today. Profits over the first half of its financial year to August 1 were damaged by Covid costs totalling £41million and reported £80million of lost earnings from its cafés, fuel and food-to-go during lockdown.
The supermarket giant said the price hike will be “driven by sustained recent commodity price increases, freight inflation, and the current shortage of HGV drivers”, but added the supermarket will seek to mitigate potential cost increases and supply issues.
The Road Haulage Association (RHA) has estimated there is a 100,000 shortage of HGV drivers across the UK, triggering gaps on shelves due to severe delays in deliveries.
In response, Morrisons said it was working on schemes to train staff to become lorry drivers and has resorted to using its own lorries to pick up stock from suppliers.
Chief executive David Potts has also indicated HGV drivers should be eligible for Skilled Worker visas, allowing them to work in the UK.
Chairman Andrew Higginson said the whole Morrisons team had shown “commendable resilience facing into a variety of continuing challenges during the first half, including the ongoing pandemic, disruption at some of our partner suppliers and the impact on our supply chain of HGV driver shortages.
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“As we approach our busiest time of year, I am confident the team will continue to rise to all challenges and keep up all the good work to improve the shopping trip for customers.”
Morrisons is currently at the centre of a takeover battle between two US private equity firms. In its results report, it said that it had received offers from Clayton, Dubilier & Rice (CD&R) and Fortress and was recommending CD&R’s offer of 285p per share.
Shareholders will be asked to approve this offer at a meeting to be held in or around the week beginning 18 October.
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