Wm Morrison Supermarkets PLC is the fourth largest chain of supermarkets in the United Kingdom. The company is usually referred to and is branded as Morrisons, and it is part of the FTSE 100 Index of companies. Morrisons' market share as of January 2008 is at 11.4%, making it the smallest of the "Big Four" supermarkets, behind Tesco (31.5%), ASDA (16.8%) and Sainsbury's (15.9%), but far ahead of the fifth place Co-operative Group, which has a share of 4.4%.
Founded in 1899 by William Morrison in Bradford, West Yorkshire, England, Morrisons was for many years focused in the north of England. With the takeover of Safeway in 2004, the company expanded southwards, and now has a total of 375 superstores across the UK.
The Morrison family currently own around 15.5% of the company.
His son, Ken Morrison took over the company in 1952, aged 21. In 1958 it opened a small shop in the city centre, followed by its first supermarket "Victoria", in the Girlington district of Bradford in 1961. In 1967 it became a public limited company listed on the London Stock Exchange.
In 2004 Morrisons, which operated mainly in the North of England, acquired Safeway, another leading British supermarket chain which owned 479 stores, mainly in Scotland and the South of England. 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. The result was a series of profit warnings being issued by Morrisons, poor financial results and a need to revert to manual systems.
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 with separate car parks. Within a few weeks, Safeway carrier bags were replaced by those of Morrisons and the new owner's own-brand products began to appear in Safeway stores.
Originally 52 stores were to be compulsorily divested after the takeover, but this was reduced to 50 after one Safeway store in Sunderland was burned down and the lease ended on another in Leeds city centre. John Lewis Partnership purchased 19 to be part of its Waitrose chain, while J Sainsbury plc purchased a further 14, and Tesco bought 10 in October 2004.
Unlike other operators, most notably Tesco and Sainsbury's, Morrisons had chosen not to move into the convenience store sector. Further to this policy decision, it was announced in late 2004 that the 114 smaller 'Safeway Compact' stores were to be sold off to rival supermarket chain Somerfield in a two- part deal worth £260.2 million in total.
Morrisons continued to sell and close stores not covered by the Competition Commission ruling, which it felt did not fit with the scale and layout of its Market Street format. In total, 254 stores were sold off by October 2006, which left the chain with 367 stores by November 2006. In all, 72 stores were sold that were neither part of the original Competition Commission ruling or part of the Safeway Compact portfolio.
One of the largest single purchases in 2005 was that of five stores by Waitrose. On July 18, 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.
In May 2005, Morrisons announced the termination of Safeway's joint venture convenience store/petrol station format with BP. Under the deal, the premises were split 50/50 between the two companies. 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.
Morrisons also sold Safeway's Channel Islands stores, in Guernsey and Jersey, to CI Traders. On the Isle of Man, the Douglas store was sold to Shoprite and the Ramsey store was sold to the Co-op. 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 .
In September 2005 the Company announced the closure of former Safeway depots in Kent, Bristol and Warrington with the loss of 2,500 jobs. The Kent depot has since been sold to upmarket rival Waitrose, whilst Warrington was apparently sold to frozen food rival Iceland. Part of the Bristol depot has been sold off to Gist.
In 2007, Morrisons opened a new Distribution Centre in Swindon and announced that it had bought the Gerber Foods site in Burnham on Sea in Somerset, for redevelopment as a fresh produce packing facility.
In 2008 Sir Ken Morrison retired from the Company.
Morrisons currently has 375 superstores in the United Kingdom (including new store openings by the end of 2007), 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 . Most Morrisons stores operate from large superstores with a core focus on groceries and homewares, with fewer electronics, clothing and furnishings than the company's main supermarket rivals.
Morrisons strategy is based on doing the basics efficiently, selling predominantly food at lower prices, and doing so only from large stores. This is a different approach from the other three big chains who have moved into services such as banking and insurance.
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).
According to CACI, as of 2006, Morrison's has market dominance in 10 postcode areas; SY (Shrewsbury), LD (Llandrindod Wells), WS (Walsall), TS (Cleveland), TD (Galashiels), BD (Bradford), HG (Harrogate), LS (Leeds), WF (Wakefield) and HD (Huddersfield).
|52/3 weeks to||Turnover (£'m)||Profit/(loss) before tax (£'m)||Profit/(loss) after tax (£'m)||Annual Report|
|3 February 2008||12,969||612.0||554.0|
|4 February 2007||12,462||369.0||247.6|
|29 January 2006||12,115||(312.9)||(250.3)|
|30 January 2005||12,116||193.0||105.0|
|1 February 2004||4,944||319.9||197.6|
|2 February 2003||4,290||282.5||186.3|
|3 February 2002||3,915||243.0||143.7|
|4 February 2001||3,496||219.1||120.0|
|29 January 2000||2,969||189.2||103.1|
Most Morrisons superstores are typically between and , with an increasing number above , offering food, homewares, some essential clothing (ie. socks, underwear), cafés and petrol stations. Many stores are noticeably unique in appearance from those of rivals, as Morrisons tend to take more care with the external and internal appearance as well as layout than other operators. In purpose built stores, the fruit and veg section is first, but next comes the drinks section, tinned goods and other heavy items - the idea being that heavy goods are placed in the bottom of the trolley. Most chillers and freezers are right at the back of the store, helping reduce the time that food is kept out of the fridge. One exception to this is that there are chillers arranged near the front of the store, usually on an external wall, which contain products such as ready meals and a limited selection of wines, beers and ciders - products which one may wish to obtain in a hurry. Many other touches distinguish the stores from other brands - for example the wine section will often have a lower ceiling than the rest of the store, in the form of curved timber with extensive use of spotlights. The wines are arranged according to country of origin on attractive timber shelving. Most of these features are generally evident in the larger ex-Safeway stores (such as Anniesland in Glasgow), and all original Morrisons stores.
All original Morrisons stores include a clock tower above the main entrance as well as three flagpoles displaying the Morrisons logo near the car park entrance (with the exception of the Erskine store which was built as an ASDA before being bought at the last minute by Morrisons), while many former Safeway stores incorporate a triangular "gable end", glass or otherwise, above the entrance (see above picture of store in Consett). This can help differentiate former Safeway stores from purpose built Morrisons stores, although it is often obvious from the internal layout - Morrisons use the entire depth of the store for their fruit and veg section, while Safeway generally used half the depth and then placed chillers in the remaining space.
211 stores are above . A number of Safeway stores retained by Morrisons were between and , with 144 stores currently in this format. These are referred to internally as the 'Choice' format, stores which do not have shopfront-style counter facades, but simply signs proclaiming the name. Morrisons hopes to replace or expand these stores to make room for the full 'Market Street' format in the future. There are also 14 stores under , coming under the same internal sub-brand.
The 'Rump' format are the same size as 'Choice' stores, but just carry the Morrisons outer logo signs, staff uniforms, product lines and IT Systems, while otherwise remaining largely as they did before the takeover of Safeway. Certain items within the stores, such as checkout dividers, car park signs and some internal signage, have simply had the Morrisons logo applied over the Safeway logo and can still clearly be identified as Safeway, whereas all evidence of the old brand has been removed from other stores. These stores are earmarked for divestment or replacement in the very near future . An example can be found in Giffnock, south Glasgow - where Morrisons are currently building a much larger replacement store nearby.
All three formats trade simply as Morrisons, so there is no obvious way to tell them apart unless you know what to look for. A regular Morrisons shopper, used to the company's policy of uniform pricing and stock across all its stores, might notice a smaller product range at a "Choice" or "Rump" store, mainly due to the space constraints.
‘Techno @ M’ Counter: A brand new range of over 60 products within the Home & Leisure department (only in some new stores). A collection of entertainment equipment including, ipods, games consoles, digital equipment and TVs.
On 15 March 2007, following a strategic review, Morrisons announced that it will ditch its traditional branding and strapline in favour of a more modern brand image. CEO Marc Bolland announced: "Reflecting our nationwide presence and our many new customers, we will be making Morrisons the food specialist for everyone".
The change will see the replacement of the current logo and the almost equally iconic "More reasons to shop at Morrisons" strapline, replaced with "fresh for you everyday" or "fresh choice for you" and "Food specialist for everyone". It will also involve the replacement of external signage, as well as changes to product packaging, point of sale, advertising, staff uniforms (replacing the old blue ties and bows to green ones) and distribution vehicles. The rationale behind the decision is the need for Morrisons to attract a wider national customer base, capitalising on its expanded geographical spread following the acquisition of Safeway.
On 23 April 2007, Morrisons revealed its new brand identity. The logo retains the familiar "M" symbol with its traditional yellow oval and "Morrisons" wording underneath, to preserve recognition, yet presents them in a subtly different style. The second stage of the rebrand will occur in early July and will include the introduction of the new tagline, as well as a new advertising campaign. The first of these adverts will feature Denise Van Outen.
On 4 June 2007, Morrisons launched their recycling "recyclopedia" for Morrisons packaging which is a new on-pack labelling scheme to help recycle more. It aims to help increase awareness of what can be recycled and where. The scheme has been welcomed by the national recycling campaign, Recycle Now, and was launched during Recycle Now Week.
On 23 July 2007, Morrisons officially launched their new look website as well as their new advertising campaign. Their first TV advertisement under the "Fresh Choice for You" slogan appeared. This showed Denise van Outen travelling all over the country, and out to sea, with a Morrisons trolley, searching for sources of the finest ingredients. She then returns to Morrisons where everything is made freshly on Market Street. The soundtrack for the advert is Take That's hit Shine which is also accompanied by a voiceover by Jim Broadbent. This is the start of a series of new adverts that will feature a range of different celebrities who will each promote the store. The new advertising campaign also unveiled a change to the new slogan, which is now "Fresh Choice for You".
Morrisons in-store advertising has become markedly more aggressive towards competitors - throughout July 2007 sandwich boards comparing prices directly with those of named competitors have appeared which give a favourable impression of Morrison's price levels.
All Morrison's own-brand product packaging is being refreshed with the new logo. The Best's packaging has now changed in colour from black to a dark green, while the Bettabuy brand has been replaced with Morrisons Value, with yellow and green packaging.
The first store to open in 2007 was Crowborough on 29 January 2007, this was followed by Speke, Liverpool on 9 July 2007. The Speke store is first to trial the new logos and uniforms (green bows and ties instead of blue). A second store in York, this one in the city centre itself, was opened.
A new Morrisons store in Dundee opened on the 29 October spearheaded by Tash Gunter, on the same day the Llanelli store opened. A new store in Bristol opened on the 12 November and Wednesbury on 26 November 2007. A new store was also opened in Johnstone, Renfrewshire. The stores in Giffnock and Erskine, Renfrewshire relocated to new sites during the year.
The Company have announced that they will open 8 new stores during the 2008/9 year. These are Whitefield - Gtr Manchester, Granton - Edinburgh, Kidderminster, Rothwell, Blandford Forum, Northallerton, Holyhead and Gorleston. They have subsequently purchased a former Co-operative Group superstore in Clifton Nottingham, which will also re-open late in 2008 after refurbishment.
It has plans to open in Openshaw - Gtr Manchester, Denton - Newcastle/Tyne, Blaydon - Gateshead, New Brighton - Wirral, Willenhall - Walsall, Connah's Quay - North Wales, and they have purchased a B&Q warehouse in Dover, Kent which they will refurbish after B&Q have vacated (probably in 2009). One key development is in the town of Rothwell, an expanded former village and suburb of South Leeds where the company is part way through a huge redevelopment of the town centre. Morrisons also redeveloped the main shopping centre, The Horsefair Centre in nearby Wetherby, rebuilding their flagship store at the centre.
Morrisons operates a distribution network composed of in-house and third party contractors, the biggest external service provider being DHL Exel Supply Chain. They run a network of regional distribution centres and depots serving stores across the country, include Wakefield J41 Distribution Centre, Gadbrook Park in Northwich, Cheshire, Stockton Distribution Centre, Latimer Park, Corby Distribution Centre and Bellshill Distribution Centre. A new centre was opened in Swindon in 2007 and in Mar 2008, they announced that they were building an advanced centre in Sittingbourne, Kent. They have confirmed that they are looking at two further sites in the West Country to provide an additional centre. It has been reported that they are looking to replace Bellshill with a new centre in Scotland.
Through Wm Morrison Produce Ltd fresh produce, plants and flowers are delivered into temperature controlled warehouses and packing plants in Cheshire, Northampton, Lanarkshire and Yorkshire as well as in Holland, for prompt onward delivery to stores. Fruit and veg is mainly supplied by Bos Brothers Fruit and Vegetables BV (owned by Morrisons) located in the Netherlands. They have purchased the former Gerber Foods site in Bridgewater, Somerset which will provide similar facilies to service stores in the South and West.
Morrisons owns Farmer's Boy food factory (in Bradford), producing pizzas, pies, cooked meats and sausages, as well as packing cheese and bacon for sales in stores, as well as operating two meat processing facilities (Lancashire,(Neerock Limited) and Aberdeen) where beef, pork and lamb are prepared and supplied direct to stores.
Woodhead Bros is owned by Morrisons with the Company operating abattoirs in Lancashire, Aberdeenshire and Lincolnshire. Because of the vertical integration of its fresh meat operations, Morrisons has been able to confirm in February 2008, that all its future fresh pork, lamb, beef and poultry will be 100% sourced from British farms.
Morrisons also used Holsa Limited to provide some of the companies packaging (company owned).
In 2005 Morrisons purchased part of the collapsed Rathbones Bakeries operation for £15.5m which make Rathbones and Morrisons bread. Rathbone Kear was initially a joint venture with the former MD of Rathbone's (who held a 20% stake). In March 2008 Morrison announced it had bought out Mr Kear's interests.
The result of all this is a highly vertically integrated company structure - unique amongst the "big four" supermarket chains in the UK.