Morrisons

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Wm Morrison Supermarkets plc
Morrisons
Public limited company
Traded asLSEMRW
IndustryRetailing
Founded(1899), Bradford, West Riding of Yorkshire, England
FounderWilliam Morrison
HeadquartersBradford, West Yorkshire,
United Kingdom
Number of locations
Increase 618 (including 103 Morrisons M local stores) [1][2]
Key people
Sir Ken Morrison (President)
Andrew Higginson (Chairman)
Dalton Philips (Outgoing CEO)
ProductsSupermarket
RevenueDecrease£17.680 billion (2014)[3]
Decrease £(95) million (2014)[3]
Decrease £(238) million (2014)[3]
OwnerMorrison family (10%)
Threadneedle Asset Management (5%)
Schroder Investment (5%)
First Eagle LLC (5%)
Silchester Investors (5%)
Investors Asset Management (5%)
Brandes Investment (5%)
Other Minor Shareholders (60%) [4]
Number of employees
125,000 [2]
SubsidiariesWm Morrison Supermarket Stores Ltd. (Supermarkets)
Safeway Ltd. and in turn Safeway Stores Ltd. (Supermarkets)
Wm Morrison Convenience Stores Ltd. (Convenience stores)
Wm Morrison Online Ltd. (Online groceries)
Neerock Ltd. (Fresh meat processing)
Farmers Boy Ltd. (Fresh food processing)
Wm Morrison Produce Ltd. (Produce packing)
Optimisation Developments Ltd (Property development)
MHE JV Co (Online groceries fulfilment centre)
Websitewww.morrisons.com
 
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For other uses, see Morrison's (disambiguation).
Wm Morrison Supermarkets plc
Morrisons
Public limited company
Traded asLSEMRW
IndustryRetailing
Founded(1899), Bradford, West Riding of Yorkshire, England
FounderWilliam Morrison
HeadquartersBradford, West Yorkshire,
United Kingdom
Number of locations
Increase 618 (including 103 Morrisons M local stores) [1][2]
Key people
Sir Ken Morrison (President)
Andrew Higginson (Chairman)
Dalton Philips (Outgoing CEO)
ProductsSupermarket
RevenueDecrease£17.680 billion (2014)[3]
Decrease £(95) million (2014)[3]
Decrease £(238) million (2014)[3]
OwnerMorrison family (10%)
Threadneedle Asset Management (5%)
Schroder Investment (5%)
First Eagle LLC (5%)
Silchester Investors (5%)
Investors Asset Management (5%)
Brandes Investment (5%)
Other Minor Shareholders (60%) [4]
Number of employees
125,000 [2]
SubsidiariesWm Morrison Supermarket Stores Ltd. (Supermarkets)
Safeway Ltd. and in turn Safeway Stores Ltd. (Supermarkets)
Wm Morrison Convenience Stores Ltd. (Convenience stores)
Wm Morrison Online Ltd. (Online groceries)
Neerock Ltd. (Fresh meat processing)
Farmers Boy Ltd. (Fresh food processing)
Wm Morrison Produce Ltd. (Produce packing)
Optimisation Developments Ltd (Property development)
MHE JV Co (Online groceries fulfilment centre)
Websitewww.morrisons.com

Morrisons is the fourth largest chain of supermarkets in the United Kingdom,[5] headquartered in Bradford, West Yorkshire, England.[6] The company's legal name is Wm Morrison Supermarkets plc. Morrisons' market share as of May 2014 was 11.0%, making it the smallest of the "Big Four" supermarkets, behind Tesco (28.7%), Sainsbury's (16.6%) and Asda (17.3%), but ahead of the fifth place The Co-operative Food (6.1%).[7][8]

Founded in 1899 by William Morrison, hence the abbreviation Wm Morrison, it began as an egg and butter stall in Rawson Market, Bradford, England. Until 2004, Morrisons store locations were primarily focused in the north of England, but with the takeover of Safeway in that year, the company's presence increased significantly in the south of England and Scotland. As of May 2014 the company now has 515 superstores and 113 Morrisons M local stores spread across England, Wales and Scotland.[1][2]

The Morrison family currently owns around 10% of the company.

The company is listed on the London Stock Exchange and is part of the FTSE 100 Index of companies.

History[edit]

Morrisons, Lakeside, Ashby, North Lincolnshire

Founding[edit]

The company was founded by William Morrison in 1899 who started the business as an egg and butter merchant in Rawson Market, Bradford, England, operating under the name of Wm Morrison Limited.[9]

His son Ken Morrison took over the company in 1952, aged 21. In 1958, Morrisons opened a small shop in the city centre.[9] It was the first self-service store in Bradford, the first store to have prices on its products, and it had three checkouts. The company opened its first supermarket, "Victoria", in the Girlington district of Bradford in 1961.[9]

Publicly traded company[edit]

Morrisons, Plompton Park, Harrogate
Morrisons store with clock tower, Doxford Park, Sunderland

In 1967, Morrisons became a public limited company listed on the London Stock Exchange.[9]

During the 1970s-1990s, Morrisons pursued a simple formula of building large, identical stores, mainly in Yorkshire and other northern counties, keeping overheads to a minimum. Profits and turnover rose steadily during the 1980s; at the end of the decade Morrisons owned 46 stores, with an average size of over 30,000 sq ft.

The only acquisitions Morrisons made were of small parcels of stores - Whelan's Discount Stores operating in Lancashire in 1978, Grandways (owned by William Jackson & Son Ltd) in 1990 and a store belonging to The Co-operative Group in 1998 - all of which could carry the uniform Morrisons format - "Market Street".

The company’s main areas of strength were in Yorkshire, Lancashire and the North East, although by the late 1990s/early 2000s it had been building stores in other parts of the country, principally the Midlands, East Anglia and Scotland. Morrisons opened its first store in the South, in Erith, London, in October 1998. The first store in Wales opened in Rhyl in November 2000. The first store in Scotland opened in Kilmarnock in February 2004.

Morrisons mainly sells food at low prices - slightly more than half of all products sold are own-label brands– and is unusual in owning some of its suppliers. Morrisons has a much smaller involvement in non-foods than Asda or Tesco. Morrisons did not offer loyalty cards, preferring straightforward selling through “value for money, unbeatable customer service and a pleasant shopping experience”.

Sir Ken Morrison’s management style emphasised simplicity, discipline, and tight control of costs. The management structure was flat, with a close-knit team which had worked together for many years. Morrisons’ return on capital employed had been consistently at or near the best in the industry.

Morrisons appeared to have suffered no serious cost penalty arising from its relatively small size compared to Tesco, Sainsbury's or Asda. Any disadvantage arising from less buying power was offset by other efficiencies, notably in operating large stores of uniform size. The main challenge facing the company had been how to maintain the rate of growth, since to do so it has to expand into parts of the country which were already well served by its competitors.

The company joined the FTSE 100 in April 2001. By the end of 2002 it had overtaken Somerfield to become the fifth largest food retailer in terms of market share with just 119 stores, but it was still a long way behind the leaders. By this time Morrisons had also achieved a 35-year unbroken track record of sales and profits growth and its market capitalisation moved well ahead of that of Safeway; some 30% of the shares were owned by the Morrison family.

Acquisition of Safeway[edit]

Safeway store in Cornwall in 2005.
Morrisons supermarket in Milton Keynes (formerly a Safeway store)
Morrisons in Chippenham, a former Safeway store

In March 2004 Morrisons, acquired Safeway, a British supermarket chain which owned 479 stores, mainly in Scotland and the south of England.[10] The company was purchased for £3.3 billion, comprising 1 new Morrisons share (enabling Safeway shareholders to have a 40% stake in the enlarged group and reducing the Morrison family's shareholding to 18%), plus 60 pence in cash (paid for by the divestment of 52 overlapping stores) for each Safeway share held. The acquisition quickly ran into difficulties caused in part by the outgoing management of Safeway changing their accounting systems just six weeks before the transaction was completed.[11] The result was a series of profit warnings being issued by Morrisons, poor financial results[12] and a reversion to manual systems.[13]

The programme of store conversions from Safeway to Morrisons was the largest of its kind in British retail history, focusing initially on the retained stores which were freehold, over 25,000 sq ft (2,300 m2) with separate car parks. Within a few weeks, Safeway carrier bags were replaced by those of Morrisons and Morrisons own-brand products began to appear in Safeway stores.[14]

Originally 52 shops were to be compulsorily divested after the takeover, but this was reduced to 50 after one Safeway store in Sunderland was destroyed by fire and the lease ended on another in Leeds city centre. John Lewis Partnership purchased 19 to be part of its Waitrose chain,[15] while J Sainsbury plc purchased a further 14,[16] and Tesco bought 10 in October 2004.[17] At the time Morrisons chose not to move into the convenience store sector (although it has since done so with its M Local stores). Further to this policy decision, it was announced in late 2004 that the 114 smaller 'Safeway Compact' stores would be sold off to rival supermarket chain Somerfield in a two-part deal worth £260.2 million in total.[18]

In Northern Ireland Morrisons sold the Safeway stores to Asda. This included a store in Bangor that opened after the Morrisons takeover.[19]

One of the largest single purchases in 2005 was that of five stores by Waitrose.[20] On 18 July 2006, a further six stores from the 'Rump' format were sold to Waitrose, including the former Safeway store in Hexham, Northumberland, which became the most northerly Waitrose branch in England.[21]

In May 2005, Morrisons announced the termination of Safeway's joint venture convenience store/petrol station format with BP. Under the deal, the premises had been split 50/50 between the two companies.[22] Five sites were subsequently sold on to BP, while Morrisons sold the rest of its sites to Somerfield and Tesco, which both maintain a presence in this market sector - Somerfield stores later rebranded to The Co-operative Food fascia.

Morrisons also sold Safeway's Channel Islands stores, in Guernsey and Jersey, to CI Traders where they continued to trade under the Safeway brand name, despite selling products from chains such as Iceland.[23] In 2011, Sandpiper CI/CI Traders sold the Channel Island Safeway stores to Waitrose and the Safeway brand disappeared from the Channel Islands.[24] On the Isle of Man, the Douglas store was sold to Shoprite and the Ramsey store was sold to The Co-operative Food.[25] The Gibraltar store was originally marketed for sale, but has now been converted under the 'Rump' format. In November 2006, plans were submitted for the extension and redevelopment of the store in order to introduce the full Morrisons format.[26]

In September 2005 the company announced the closure of former Safeway depots in Kent, Bristol and Warrington with the loss of 2,500 jobs.[27] The Kent depot has since been sold to upmarket rival Waitrose, whilst Warrington was sold to frozen food rival Iceland. Part of the Bristol depot has been sold off to Gist.[28] The store conversion process was completed on 24 November 2005 when the Safeway fascia disappeared from the UK.[29]

Optimisation Plan[edit]

Morrisons at Speke

Following the acquisition of Safeway, Morrisons encountered a number of difficulties. The company had issued five profits warnings since the acquisition, and it was felt that the original Morrisons northern format did not work as well in some of the former Safeway stores in the south.

To reinvigorate its new national image, Morrisons appointed the Dutchman Marc Bolland (the Chief Operating Officer of Heineken), as its new Chief Executive. He updated the brand, by de-cluttering stores, making its marketing clearer and introducing a more modern logo. The long-running slogan since the 1980s, "More reasons to shop at Morrisons", was replaced by "Fresh choice for you", emphasising that Morrisons makes and prepares more fresh food in-store than any other major food retailer in the United Kingdom. This three-year programme was known as the "Optimisation Plan".

By early 2008, Morrisons had completely recovered from its initial integration difficulties following the acquisition of Safeway. Sales revenue was at record levels, sales per square foot and average basket size was now the same across all stores, and the profit margin had recovered with record pre-tax profits.

Retirement of Sir Ken Morrison[edit]

On 13 March 2008 Sir Ken Morrison retired as Chairman after 55 years at the company and was made Honorary President.[30]

Purchase of Co-op and Somerfield stores[edit]

When the Co-operative Group completed its takeover of the Somerfield supermarket chain in March 2009, it was required to sell a number of stores by the Competition Commission. Morrisons purchased 35 stores from the combined group, mostly trading under the Somerfield fascia.[31] These new stores were the first of more than 100 identified by Morrisons for expansion into smaller supermarkets as it aims to have a store within 15 minutes of every UK home.[32]

Multi-channel diversification[edit]

Morrisons supermarket, High Street, Saltney, Flintshire
Morrisons M local, Roundhay Road, Oakwood, Leeds

Following Marc Bolland's departure to become the CEO Marks & Spencer in December 2009, Dalton Philips was appointed in a surprise move as his replacement in January 2010.[33] He has led Morrisons into its introduction of online shopping and convenience stores, as well as updating its original estate into a more contemporary theme through the refurbishment of stores as "Fresh Format" (originally "Store of the Future").

In 2010, Morrisons signed a deal with budget retailer Peacocks, the first concession store opened as part of a refurbishment at the retailer's store in Idle, Bradford.[34] The Peacocks section was rolled out into other stores before launching its own childrenswear brand 'Nutmeg' into 85 stores on 21 March 2013.[35] Speculation is that Morrisons is investigating a launch into adult clothing during 2014.[36]

The first Morrisons M local store opened in Ilkley, Yorkshire in 2011.[1]

Throughout December 2012 the supermarket chain saw a 2.5% decline in sales. This led the supermarket chain to label their financial performance for the Christmas period 2012 as being a disappointing one, although the supermarket still claimed that they were on track to meet their targets.[37]

In May 2013 Morrisons announced a partnership with Ocado to use its technology systems and distribution infrastructure to help launch its own online service.[2] This contrasts with Morrisons rivals who own all their online shopping infrastructure themselves.

Morrisons Christmas 2013 like-for-like sales declined by 5.6%. The company blamed its lack of an online shopping operation (which only launched in January 2014), despite both Aldi and Lidl doing well - both of which do not have online shopping operations.

As of February 2014, after four years, this strategy has had mixed success.

Potential private equity takeover bid[edit]

In February 2014, it emerged that younger members of the founding Morrison family, who own 10% of the company and who are thought to include two of Honorary President Sir Ken Morrison's children, William Morrison Junior and Andrea Shelley, along with Sir Ken Morrison's niece and her husband, Susan and Nigel Pritchard, had approached a number of private equity firms about taking the company private. They were said to be extremely unhappy about the company's disastrous financial performance, and the corporate strategy being undertaken by Dalton Philips.[38]

Public criticism by the Morrison family[edit]

Following a new three-year corporate strategy revealed in March 2014 aimed at recovering sales and market share, at Morrisons Annual General Meeting in June 2014, Morrisons former chairman Sir Ken Morrison blasted Dalton Philips and his new board of directors for destroying the company he inherited from his father; Morrison remarked on Philips's strategy to save the failing supermarket from the pressures of Aldi and other discounter stores, stating "When I left work and started working as a hobby, I chose to raise cattle. I have something like 1,000 bullocks and, having listened to your presentation, Dalton, you've got a lot more bullshit than me." He also remarked that Philips should resign from the company.

Morrison's comments were backed up by his nephew Chris Blundell, who controls most of the remaining family stake in the supermarket, who also told the board it needed rescuing, and welcomed the decision by chairman Sir Ian Gibson to leave the business next year (in June 2015) after months of pressure.[39]

Morrisons restructuring plans[edit]

In June 2014, Morrisons announced that there are plans put in place to cut 2,600 jobs as a result of changes to its management structure.[40] Morrisons stated that it had trialled the new structure and believed that better performance was achieved via these methods. However, these cuts would primarily affect department manager and supervisory positions. Morrisons would create 1,000 jobs in Morrisons M local convenience stores and 3,000 in new supermarkets. Following this, Morrisons sold its distribution centre in Kent to a real estate investment company for £97.8 million. In turn, the depot in Kemsley, will be immediately leased back to the supermarket chain on a 25-year agreement with a £5.4 million rental fee per annum.[41]

Change of leadership again[edit]

Morrisons supermarket, Seacombe (a former Netto store), due to close in 2015

Following a 3.1% drop in like-for-like sales in the Christmas 2014 trading period, Morrisons announced on the widely expected resignation of the heavily publicly criticised Chief Executive of five years, Dalton Philips, to become effective in March 2015. In addition, the Chairman Sir Ian Gibson would stand down six months early to be replaced by former Tesco Chief Financial Officer Andrew Higginson at the end of January 2015.[3]

Morrisons also announced the closure of ten small loss-making stores (eight former Netto UK stores and two former Somerfield stores (bought under Philips's leadership)) in Cramlington, Accrington, Ravensthorpe, Bransholme (Hull), Telford, West Bromwich, Wallasey (Seacombe - store pictured on the right), Newton le Willows, Rugby and Crawley.[4] In addition, six unprofitable convenience stores would close, and the roll-out of the convenience store chain would be slowed, as a batch of 40 sites would no longer be bought.[5]

Both the former Chairman Sir Ken Morrison and the former Morrisons Property Director of 35 years under Sir Ken Morrison, Roger Owen, welcomed the news. Roger Owen stated that he would actually welcome former Chief Executive Marc Bolland (the current CEO of Marks & Spencer) back as Chief Executive.

Senior management[edit]

Morrisons' headquarters in Bradford, West Yorkshire.

In March 2008 Sir Ken Morrison retired from the company. He now holds the position of Honorary President.[42] Sir Ken Morrison was succeeded by Sir Ian Gibson who was replaced by former Tesco Chief Financial Officer Andrew Higginson in January 2015.

Dalton Philips is the current CEO, replacing Marc Bolland who left to become CEO of Marks & Spencer.[43] Dalton Philips is due to step down after five years in charge. Morrisons said the search had begun for a replacement for him and he would stay until the year-end results in March 2015.[44]

The former CFO of Morrisons was Richard Pennycook, who had joined Morrisons in October 2005.[45] He later became interim CEO of The Co-operative Bank, and was replaced at Morrisons in June 2013 by Trevor Strain, previously Finance Director Corporate.[46]

Financial performance[edit]

The financial results have been as follows:[3]

52/3 weeks toTurnover (£'m)Profit/(loss) before tax (£'m)Profit/(loss) after tax (£'m)
2 February 201417,680(176.0)(238.0)
3 February 201318,116879.0647.0
29 January 201217,663947.0690.0
30 January 201116,479874.0632.0
31 January 201015,410858.0598.0
1 February 200914,528655.0460.0
3 February 200812,969612.0554.0
4 February 200712,462369.0247.6
29 January 200612,115(312.9)(250.3)
30 January 200512,116193.0105.0
1 February 20044,944319.9197.6
2 February 20034,290282.5186.3
3 February 20023,915243.0143.7
4 February 20013,496219.1120.0
29 January 20002,969189.2103.1

Current operations[edit]

Morrisons at Wetherby, West Yorkshire
A Morrisons petrol station in Wetherby, West Yorkshire

Morrisons currently has 569[47] superstores in the United Kingdom (February 2014), including those it retained following its purchase of Safeway plc (see below). Until 2004, Morrisons superstores were largely concentrated in the English Midlands and the North of England, but had expanded southwards, beginning with a store at Erith, Greater London, which opened in 1998.[48] Most Morrisons stores operate from large superstores with a core focus on groceries and home wares, with fewer electronics items, clothing and furnishings than the company's main supermarket rivals.

Whilst all Morrisons stores trade as "Morrisons", the company has not completely integrated former Safeway stores into its original estate. The stores operated by Morrisons prior to the Safeway acquisition and new build stores, are operated by Wm Morrison Supermarkets PLC itself. However, bizarrely, all the former Safeway stores have been retained under the operation of the company Safeway Stores Ltd. This means that whilst Morrisons appears to be one company as a customer facing brand, the company is actually run as two separate supermarket chains.

Morrisons is vertically integrated, and owns its own manufacturing division, consisting of meat and cheese factories, abattoirs, fruit and vegtable factories, a flower arrangement factory, a bakery, a fish factory and a farm

Morrisons also owns a substantial property portfolio, as over 90% of its stores are freehold.

Morrisons supermarkets are currently split into 6 areas of the UK. Scotland (51), North (72), Midlands (75), South East (63) with one of these in Gibraltar, South Central (62) and the South West (51).

Morrisons did not offer a loyalty scheme – except in its petrol stations, which is called the Morrisons Miles card. However, in October 2014 they unveiled their new 'Match and More' scheme issuing points to customers based on instore deals, and price comparison against Tesco, Sainsburys, Asda, Aldi, and Lidl.

Market share[edit]

Morrisons market share decreased after its purchase of Safeway, but it eventually grew again after the store disposals and conversions.

As of February 2012 Morrisons has a 12.2% market share down 0.1% from the year before, still the smallest of the 'big four' supermarkets.[49]

According to CACI, as of 2006, Morrisons has market dominance in 10 postcode areas; SY (Shrewsbury), LD (Llandrindod Wells), WS (Walsall), TS (Cleveland), TD (Hawick), BD (Bradford), HG (Harrogate), LS (Leeds), WF (Wakefield) and HD (Huddersfield).[50]

Store formats[edit]

Morrisons operates two stores formats: Superstores and Convenience stores.

Superstores[edit]

Morrisons in Wellington

The traditional format of Morrisons superstores is called Market Street. The meat is near or next to the butcher's counter, the delicatessen being traditionally named Provisions with cheese fridge nearby and a rottisserie counter named Oven Fresh. There's a Pie Shop in every store and a bell rings when a fresh batch comes out of the oven. The overall theme is based on an early 20th century street setting in the north of England running around the edge of the store, with more conventional aisles in the centre. Most Morrisons superstores are typically between 28,500 sq ft and 36,000 sq ft, with an increasing number above 36,000 sq ft, offering food, home wares, some essential clothing (i.e. socks, underwear), cafés and petrol stations. They are freehold single storey brick buildings and have separate surface ground car parking.

Under the 2010-2015 Chief Executive, Dalton Philips, Morrisons has introduced a more contemporary store format, called the "Fresh Format". This format has seen the stores been taken upmarket, in a move which has been attacked by Honorary President Sir Ken Morrison and City analysts. The format has had mixed success, and an updated "Fresh Format" store was introduced in Croydon in 2013, which reverted to the traditional shop fronts theme. The roll-out of Fresh Format stores was quietly dropped altogether in 2014.

Morrisons former store in Consett, County Durham, originally a Safeway. This was replaced with a new build store in November 2012.

A number of Safeway stores retained by Morrisons were between 15,000 sq ft and 25,000 sq ft. Morrisons hopes to replace or expand these stores to make room for the full 'Market Street' format in the future.

Morrisons in Vale Road, Tunbridge Wells (a former Safeway store)

In addition, a number of former Safeway stores were originally marketed for sale, but were eventually unable to be divested. These stores are leasehold and under 25,000 sq ft in size. They have all since been converted to the Morrisons brand. The Bracknell branch is part of The Peel Centre retail park, the Shepherd's Bush branch is part of the West 12 Shopping Centre, the Streatham branch has underground car parking and the Tunbridge Wells branch has a multi-storey car park above it.

All stores trade simply as Morrisons.

Convenience stores[edit]

Morrisons M local, Church Street, Liverpool
Morrisons M local, Arndale Centre, Headingley, Leeds

The company operates a number smaller stores called "Morrisons M local" in major places such as Birmingham, Manchester Cardiff and Bristol. These stores have a similar format to small Tesco Express and Sainsbury's Local stores, but include a wider range of ready-to-eat hot food such as pastries, coffee, rotisserie, porridge and also a salad bar, items are stocked from near by superstores and shoppers can also order foods in including fresh meat and fish.[51]

The first store opened in Ilkley, Yorkshire in 2011. [6] The M local shops are stocked by nearby full-sized Morrisons supermarkets. A dedicated team of delivery men shuttle between the large 'hub' shop and the smaller convenience store to keep the latter's shelves fully stocked. This contrasts with rival supermarkets, who tend to replenish their smaller stores from central warehouses. They also charge the same prices as the larger stores, unlike some of Morrisons competitors.

A distribution centre in Feltham, West London was acquired to provide a distribution network to the stores in London and the South East where there are few superstores.[52]

Around 70 stores were opened by the end of 2013, which was boosted by the purchase of 7 Jessops and 49 Blockbuster stores from administrators.[53] On 26 February 2013, a further 6 HMV stores were acquired from administrators.[54]

Morrisons has been criticised by both City analysts and its former Property Director under Sir Ken Morrison, Roger Owen, for rushing the opening of convenience stores. Many of the sites were claimed to be in secondary locations with lower footfalls. Morrisons were also accused of overpaying on rent. The first store in Ilkley, Yorkshire opened after Morrisons outbid a competitor by 30%.[7]

In November 2014, Morrisons announced the closure of six convenience stores - in Enfield and Kensington in London; as well as in Waltham Cross, Hertfordshire; Headington, Oxfordshire; and Aberdeen and Kilmarnock in Scotland. In addition, Morrisons pulled out of a deal to buy 40 sites thus slowing down the roll-out of its M local convenience store chain.[8]

Other operations[edit]

Morrisons dry-cleaners in Reigate, Surrey

In addition to traditional retail supermarket stores, Morrisons has a number of other operations:

Morrisons Cellar[edit]

In 2012, The group launched its first retail website called "Morrisons Cellar" selling wine from around the world.[55] This venture has not proved as successful as originally hoped.

NUTMEG clothing[edit]

A clothing brand that launched on 21 March 2013.

Morrisons.com[edit]

Unlike its major competitors, Morrisons has only recently branched towards offering an online shopping service.

In May 2013 Morrisons announced a partnership with Ocado to use its technology systems and distribution infrastructure to help launch its own online service.[9] This contrasts with Morrisons rivals who own all their online shopping infrastructure themselves.

The service launched in January 2014.

Former operations[edit]

Kiddicare[edit]

In 2011, Morrisons bought children's retailer Kiddicare for £70m to give it the knowledge to sell clothing and homewares online.[56] In 2012 10 former Best Buy stores from the Carphone Warehouse were acquired to expand Kiddicare into retail stores.[57] In March 2014 Morrisons CEO Dalton Phillips announced the company's intention of selling Kiddicare. The company was sold to the Endless private equity firm for £2 million in July 2014, only to be sold on to Worldstores two months later (in September 2014) for an undisclosed sum.[10]

FreshDirect[edit]

Morrisons purchased a 10% stake in New York based online grocer FreshDirect. After having sent a team to New York to learn from the business ahead of the predicted launch in 2013, Morrisons now has a fleet of home delivery vehicles and began a home delivery initiative in January 2014. In March 2014 Morrisons CEO Dalton Phillips has announced they have sold their 10% stake in FreshDirect due to financial difficulties the company is facing and that they have set up their own online site so they no longer need FreshDirect.

Marketing and branding[edit]

Logos and slogans[edit]

1980 – 2007 Logo
The current Morrisons logo

On 15 March 2007, Morrisons announced that it would ditch its existing branding and strapline in favour of a more modern brand image. Their lower price option brand, Bettabuy, was also changed to a more modern brand called the Morrisons Value range.[58] This brand was then changed once again in 2012 as Morrisons launched their low price option brand called M Savers.

The change saw the replacement of the old yellow and black logo, along with the "More reasons to shop at Morrisons" strap line, replaced with "Fresh choice for you". In 2010 this was replaced by "Eat Fresh. Pay less." This was later changed again in 2013 to "More of what matters". It also involved the replacement of external signage, with the previous Morrisons signs being retained alongside the new logo, as well as changes to product packaging, point of sale, advertising, staff uniforms (replacing the old blue ties and bows with green ones) and distribution vehicles. The rationale behind the decision was the need for Morrisons to attract a wider national customer base, capitalising on its expanded geographical spread following the acquisition of Safeway.[59]

Loyalty card[edit]

The Morrisons Match & More card price matches their customer’s comparable grocery shop with Aldi, Lidl, Tesco, Sainsbury’s and Asda. If Morrisons customers spend £15 or more and could’ve paid less for their comparable groceries, Morrisons automatically give them the difference in points on their card at the checkout. Both in store and online. 1p difference = 10 Match points. £1 difference = 1,000 Match points. Morrisons price match across the store – on brands and all comparable own label products and fresh food, even those that are on promotion elsewhere. They do all the calculating for their customers when they get to the checkout and add the points to their card automatically – their customers don’t need to do anything. Morrisons customers will also get more points on 100s of products in store and online. And customers can collect points every time they fill up with fuel at a Morrisons petrol station – every litre of fuel = 10 More points. And points turn into pounds. Once customers have collected 5,000 Match & More points, Morrisons gives them a £5 voucher to spend or save.

Product ranges[edit]

Morrisons stocks thousands of lines which are sold as their "Own Brand" goods. These include:

Distribution[edit]

Morrisons distribution centre, Bridgwater, Somerset

In 2005 Morrisons purchased part of the collapsed Rathbones Bakeries operation, which makes Rathbones and Morrisons bread, for £15.5 million.[61]

In 2007, Morrisons opened a new Distribution Centre in Swindon[62] and announced that it had bought a new site on Junction 23 of the M5 in Bridgwater in Somerset, for redevelopment as a fresh produce packing facility.[17]

In 2011 Morrisons opened a new 767,500 sq/foot distribution centre in Bridgwater as part of the £11 million redevelopment project. This project also created 1,200 new jobs.[63][64]

Criticism[edit]

Alcohol sales controversy[edit]

Since 2007, Morrisons has received some negative publicity over alcohol sales and the implementation of its policy that anyone who appears to be 25 or under and is purchasing alcohol must prove that they are above the legal drinking age. First, the BBC reported in September 2007 that a Morrisons store in West Kirby, Wirral, had refused to sell two bottles of wine to a 72-year-old man because he refused to confirm that he was over 18.[65] Morrisons refused to admit that a mistake had been made, explaining through a spokesman that to "limit any element of doubt staff at the West Kirby store are required to ask anyone buying alcohol to confirm that they are over 18."[65] Next, in September 2009 a Morrisons in Knottingley, West Yorkshire, was caught in a police sting and the company was fined for selling alcohol to a 15-year-old girl.[66]

Two weeks later, The Guardian published an article on Jackie Slater, a woman in her 50s who had been refused a sale of a bottle of wine while shopping with her 17-year-old daughter.[67] Again Morrisons stood by the store's action, explaining through a spokesman that "stores are unable to sell an alcoholic product to a customer they believe could be buying for a minor or for someone who is unable to prove their age."[67]

The checkout assistant involved in the incident told The Guardian that she would have been allowed to buy the wine had she been shopping with younger children.[67] This prompted Leeds North West MP Greg Mulholland to comment that "Morrisons should be ashamed of themselves" and that "Whoever thinks this policy will do anything to stop antisocial drinking by kids is in cloud-cuckoo-land."[67]

Advertising[edit]

In December 2012 a television advertising campaign which showed a child giving a dog pieces of Christmas pudding was criticised by the British Veterinary Association and the Kennel Club. Christmas pudding contains ingredients which can be harmful to dogs which led to concern that the behaviour in the clip could be copied with detrimental consequences for animals. A spokesman for Morrisons stated that they had sought veterinary advice before filming and a vet was present during the shoot. Advice given was that "...there would be minimal, if any, risk to a dog of serious toxic reaction should a small amount, in relation to its body weight, of Christmas cake or pudding be consumed on a one-off basis.”[68]

Help for Heroes[edit]

In May 2013, a Morrisons worker at the store in Victory Retail Park, Portsmouth was suspended for wearing a Help for Heroes wristband and a remembrance poppy.[69] The member of staff faced disciplinary action over "breaching the company's uniform policy". Morrisons later reinstated the worker and updated its policy. [70]

Angel of the North[edit]

In May 2014, Morrisons projected an image of a baguette onto the Angel of the North. The sculpture's designer, Antony Gormley, said, "I'd rather the Angel is not used for such purposes".[71] Morrisons later apologised.[72]

Slavery in Thailand[edit]

In 2014, The Guardian reported that Morrisons is a client of Charoen Pokphand Foods. During 6 months, The Guardian traced down the whole chain from slave ships in Asian waters to leading producers and retailers. [73]

In popular culture[edit]

See also[edit]


References[edit]

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  26. ^ Friends of Gibraltar Heritage Society[dead link]
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  68. ^ http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9730365/Morrisons-faces-criticism-over-dog-feeding-Christmas-ad.html
  69. ^ Philipson, Alice (28 May 2013). "Morrisons employee suspended for wearing Help For Heroes bracelet". The Telegraph. Retrieved 30 July 2014. 
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  71. ^ Tran, Mark (4 May 2014). "Morrisons employs Angel of the North to sell bread". The Guardian. Retrieved 30 July 2014. 
  72. ^ Corcoran, Kieran (6 May 2014). "A half-baked plan? Morrisons apologises for using Angel of the North as a giant advert for 175ft FRENCH STICK after backlash". Mail Online. Retrieved 30 July 2014. 
  73. ^ Hodal, Kate; Kelly, Chris; Lawrence, Felicity (10 June 2014). "Revealed: Asian slave labour producing prawns for supermarkets in US, UK". The Guardian. Retrieved 11 June 2014. Charoen Pokphand (CP) Foods, buys fishmeal, which it feeds to its farmed prawns, from some suppliers that own, operate or buy from fishing boats manned with slaves. ... CP Foods admits that slave labour is part of its supply chain. 

External links[edit]