Morrisons has confirmed a 51% fall in underlying half year profits to £181m following a big drop in sales.
The supermarket chain, which like market leader Tesco has suffered amid the challenge from hard discounters, said like-for-like sales excluding VAT and fuel sales tumbled 7.4% on the same period last year.
The results showed profits were hurt hurt by its decision earlier this year to cut prices to counter the loss of market share to the discounters such as Aldi and Lidl and by a weak overall food market.
Morrisons' non-executive chairman, Sir Ian Gibson, described overall conditions as "tough".
The profit total was its lowest for eight years though Morrisons said it was paying an interim dividend of 4.03p-per-share, up 5% and confirmed a commitment to pay a full-year dividend of no less than 13.65p.
It held its full-year underlying pre-tax profit guidance at £325m-£375m - which also helped its share price higher in early trading following a 40% fall over the past 12 months.
In addition to the industry price war, Morrisons was late to join the rush for convenience store offerings and online grocery shopping.
The chain's chief executive, Dalton Philips, insisted its three-year plan to turnaround the company's fortunes - including £1bn in savings - was beginning to show signs of progress.
He said: "We are six months into the three-year plan that we set out in March and, although it is early days, I am encouraged by the progress we have made.
"There is an enormous amount of change and modernisation flowing through our core business, much of it enabled by new systems.
"Price investment, in-store improvements and better products were all key components of the work undertaken in the first half and the Morrisons Card launches soon".
He said online and convenience were "progressing well" though the general results statement admitted "headwinds".
Tesco and Morrisons have been the big losers in terms of market share amid the discount challenge to the major four chains.
Tesco, which sacked Philip Clarke as chief executive, recently cut its half-year dividend payment by 75% in order to preserve funds for Mr Clarke's replacement Dave Lewis.
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