Member Article

Morrisons report £176 million loss and admit lack of online was mistake

Supermarket chain Wm Morrison has reported a £176 million loss in its last financial year, compared with profits of £879 million the year before.

A dip in turnover and some £900 million exceptional costs, including the £168 million acquisition of Kiddiecare, impacted the supermarket’s profitability.

Chairman Sir Ian Gibson said a lack of “meangingful” online and convenience presence had clearly held the business back.

He said: “In trading terms this has been a disappointing year for Morrisons, with consumer confidence and market conditions continuing to be challenging. It has however been a period of significant strategic progress as we lay the foundations for a stronger future. Our financial position remains strong.”

The supermarket now plans to embark on a programme of “self help” over the next three years, which aims to make £3 billion savings.

Dalton Philips, chief executive, said: “The strategy we are announcing today is a bold and comprehensive response to the fundamental structural changes that are taking place in grocery retail.

“We are significantly reducing our cost base and will invest £1 billion into our proposition over the next three years, to improve our value even further and to defend and strengthen our competitive position. Customers will see this in our stores as well as in our fast growing online and convenience offers.

“At the same time we will exit non-core activities, significantly reduce our capital expenditure and deliver improved operating cashflow and return on capital employed.

“Together with the strategic value of our vertically integrated supply chain, these measures will provide a firm foundation from which to provide outstanding value to our customers and to generate meaningful shareholder returns over the medium term.

“I’m confident that Morrisons will emerge from this period of necessary change as a more focused, more distinctive value leader and well positioned to compete sustainably in the new grocery landscape.“

This was posted in Bdaily's Members' News section by Tom Keighley .