News: UK-based retailer Morrisons' underlying profits declined 10% year-on-year (y-o-y) to GBP401mn (US$634.14mn), while its pre-tax profits dropped 22% y-o-y to GBP344mn (US$544mn) in H113/14 ended August 4. The drop has been attributed to a decline in underlying sales. The company reported turnover of GBP8.9bn (US$14.07bn) during the period, and total store sales increased just 0.8%. The company's like-for-like sales declined 1.6% in H113/14.
BMI View: The latest retail sales data suggest that the UK consumer sector remains challenging, and the UK's decision to frontload its fiscal cuts means that this pattern is likely to remain prevalent for the next two years.