Morrisons plans to extend a regional scheme, selling bread made from flour milled in the local area.

Bakery trading manager Andy Clegg said the concept had worked well in East Anglia, Yorkshire and Wessex, and that stores in other parts of the country would launch locally milled bread later this year.

Bakery sales were above expectations and had seen substantial year-on-year growth, according to Clegg, speaking after the chain reported annual pre-tax profits up to £655m from £612m in 2007, with sales up 12% to £14.5bn.

"It’s down to the implementation of our strategy and a greater emphasis on food values, innovative products and developing the skills of our bakers," he said. "Plant sales are still in volume growth and we have seen a switch to white bread in the last eight months, as a lot more people are making sandwiches at home."

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