Morrisons has said customers are “feeling the squeeze” in the face of rising food prices as it revealed a slowdown in sales over the latest quarter.
Boss Rami Baitieh said inflation has “increased further” over the past two months amid a “challenging” environment for the business.
It came after figures from the Office for National Statistics (ONS) showed that the rate of food and drink inflation rose to 5.1% in August, from 4.9% in July.
Mr Baitieh said: “Consumers are feeling the squeeze and we are continuing to work hard to help our customers make the most of stretched household budgets, staying true to Morrisons values of providing good affordable fresh food for all.
“In the fourth quarter, inflation has increased further and we are adapting and adjusting to make sure we continue to offer the best value, cutting prices for all customers, tailoring promotions and offering More Card customers even better rewards for their loyalty.”
The retailer announced prices cuts on around 650 products earlier this week as it continues to invest in price in order to attract more customers amid the growth of discount rivals and similar price strategies by Tesco and Sainsbury’s, the UK’s two largest grocers.
Morrisons’ chief executive added that its efforts to improve price for customers comes amid pressure from “significant cost headwinds” linked to the previous autumn budget and other Government legislation.
This included increases to the national minimum wage, national insurance contributions and new packaging taxes.
The UK’s fifth largest supermarket group revealed that total sales grew by 3.5% to £4 billion for the 13 weeks to July 27.
It represented a slowdown from growth of 4.2% in the previous quarter.
Morrisons also said it secured £63 million of cost savings over the period, as it remained on track to hit its target of £1 billion in savings by the end of the 2026 financial year.
Jo Goff, chief financial officer said: “We delivered a resilient performance in Q3 in tough market conditions and with significant external cost headwinds.
“We also made further progress with our capital structure, completing a material refinancing which further reduced gross debt, and proactively extended maturities to 2031.
“We have now repaid a total of £2.7 billion of debt since the acquisition of the business by CD&R (Clayton Dubilier & Rice), bringing the current debt figure down by around 43% from £6.2 billion to £3.5 billion.”
