William Morrison concerned about UK market

William Morrison, the UK's fourth-largest supermarket chain, has today revealed figures showing a 0.9% like for like growth in the second quarter of 2010 against 0.8% growth in the first quarter. However, these figures are at the bottom end of analyst's expectations and as a consequence the shares have fallen this morning. However, Morrison's have a number of ideas for the future to try and combat the expected reduction in consumer spending.

The company is now looking to open a number of small convenience stores, in line with Tesco, and is also investigating the possibility of selling goods online. This comes at a time when the UK market sector appears to be struggling with price inflation squeezing profit margins and consumer spending set to wane over the short to medium term. It will likely be difficult to for supermarkets such as Morrison to push ahead in the short-term under such difficult conditions although the company does appear to be fighting back.

First half profitability came in at £410 million which was a 14% increase on the same period last year although the second half of 2010 could be very different. Slowly but surely each and every supermarket chain in the UK is feeling the pinch as we approach the crunch point in relation to a possible double dip recession.