Morrisons has reported a fall in profits from a six month period it described as “challenging”.

Pre-tax profits in the first half of the year, ending 4 August, were £344m, down from £440m during the same period in 2012.

Total sales were £8.9bn, the same as last year, but like-for-like sales declined 1.6 per cent.

“Consumer confidence and market conditions have remained challenging in the first half,” said Sir Ian Gibson, non-executive chairman. “We have continued to invest in and develop our customer offer and this has been reflected by an improved sales performance compared to the second half of last year.”

Chief executive Dalton Philips said the company’s strategy was to focus on the continued growth of its convenience stores and the launch of its online offer in January 2014, in partnership with Ocado.

“This is against an economic backdrop which remains difficult for the consumer, but where our relentless focus on providing great value and quality to our customers, and improving the way we communicate Morrisons unique points of difference, have been reflected in a steady improvement in our like-for-like sales performance.”

The retailer now has 33 M Local convenience stores and is on track to have 100 open this year. It also opened seven new supermarkets in the first half of 2013 and launched 2,800 own brand products.

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