Morrisons profits fall, extends Nutmeg to shampoo, conditioner bars
Supermarkets giant Morrisons has reported falling profits and rising costs in its supply chain due to a shortage of lorry drivers and other issues.
The company, which makes the Nutmeg clothing brand and is currently the subject of a bid battle from US private equity groups, said profit before tax and one-off items dropped by over a third to £105 million in the half to August 1.
That was partly because of £41 million of Covid-19-linked costs, as well as it earning £80 million less from its cafés, from its food-to-go offer and from fuel.
And it said that it's facing issues beyond its control such as “sustained supply chain cost increases”. This could mean rising prices in the months ahead as commodity and transport costs continue to move upwards.
But the company still expects sales to rise in the second half of the financial year and is forecasting profits of more than £431 million for the full year.
It said revenues in the first six months rose 3.7% to £9 billion and online sales on a like-for-like basis rose 48%.
It didn't break out sales figures for the Nutmeg brand separately, which is the standard approach for supermarket chains. We rarely hear about how the George at Asda line is performing or the F+F line at Tesco. Sainsbury's is quite unusual in breaking out sales of the Tu Clothing line separately.
However, it's clear that the Nutmeg brand as a whole is increasingly important to the business. As well as clothing, it also includes items such as homewares and baby products. And it's interesting that the company uses it for own-brand beauty too.
In fact, with these results, it said it has become the first UK supermarket to launch an own-brand range of shampoo and conditioner bars into its permanent haircare range. Lasting up to 30 washes, its Nutmeg Shampoo and Conditioner Bars are 100% plastic-free, vegan, and packaged in fully recyclable cardboard cartons.
That’s likely to go down well with its increasingly eco-conscious consumers and should boost awareness of the Nutmeg brand as a whole much further.
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