Morrisons has warned it expects “industry-wide” price rises ahead while reporting half-year results showing a 43% slump in profits.

The UK’s fourth-largest supermarket chain by market share said the hikes were to be “driven by sustained recent commodity price increases and freight inflation, and the current shortage of HGV drivers”.

However, it expected to help “mitigate” the increase in costs, signalling that the continuing price war in the sector will limit higher prices at tills as the major chains battle the challenge posed by discounters such as Aldi and Lidl.

The company, currently at the centre of a takeover battle, said profits over the first half of its financial year to 1 August were damaged by further COVID-19 costs totalling £41m.

It reported £80m of lost earnings from its cafés, fuel and food-to-go as pandemic measures bit and demand remained constrained.

The firm’s bottom line statutory profit before tax figure came in at £82m, compared to £145m in the same six-month period last year, as a result.

Total sales rose by almost 4% to £9.1bn during the period aided by a surge in online sales during the pandemic and its wholesale business.

Morrisons said that online like-for-like sales growth was up 48% but overall like-for like sales growth, excluding fuel, declined slightly by 0.3% as competition in the sector continued to bite.

The company told investors that profit guidance for the full 2021-20 year had been maintained.

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