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Morrisons
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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.
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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 382 superstores across the UK.
The Morrison family currently own around 15.5% of the company.
History
Humble beginnings
The Company was founded by William Morrison in 1899, initially as an egg and butter merchant in Rawson Market, Bradford, England operating under the name of Wm Morrison (Provisions) Limited.
His son, Ken Morrison took over the company in 1952, aged 26. In 1958 it opened a small shop in the city centre,. 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. This came with 5,000 sq ft of selling space and car parking spaces for customers, the location only being chosen after Morrisons could not afford to build a supermarket closer to the city centre.
A new era as a publicly traded company
In 1967 it became a public limited company listed on the London Stock Exchange as Wm Morrison Supermarkets PLC. The offer was 174 times oversubscribed as more than 80,000 investors applied to purchase shares. In 1971, Morrisons new head office, the original Hilmore House, opened. By 1975, Morrisons operated 12 stores. In 1978, Morrisons purchased Whelan's Discount Stores (founded by Wigan Athletic owner David Whelan), 12 stores which saw Morrisons expand into Lancashire for the first time.
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 square feet. In each store was Morrisons new "Market Street" concept, with the shop elaborately decorated to resemble a Victorian High Street. The company also introduced the famous "More reasons to shop at Morrisons" slogan, along with the yellow and black logo. In 1986 its market share reached 1.4%.
The 100th store opened in Nelson in the company's centenary year by newly knighted Executive Chairman Sir Ken Morrison. Non-food space allocation in 1999 was 27.9%.
Morrisons achieved a 35-year unbroken track record of sales and profits growth by 2004; the company joined the FTSE100 in April, 2001, and its market capitalisation moved well ahead of that of Safeway; some 40% of the shares were then owned by the Morrison family.
Acquisition of Safeway
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.
In Northern Ireland Morrisons sold Safeway's stores to ASDA. This included a store in Bangor which actually opened after the Morrisons takeover.
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 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.
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.
The store conversion process was completed on 24 November 2005 when the Safeway fascia disappeared from the UK.
In 2007, Morrisons opened a new Distribution Centre in Swindon and announced that it had bought the Gerber Foods site in Bridgewater in Somerset, for redevelopment as a fresh produce packing facility.
In 2008 Sir Ken Morrison retired from the Company.
Current operations
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, which have moved into services such as banking and insurance; place greater emphasis on non-foods, with ASDA and Tesco operating some non-food only stores; and in the cases of Tesco and Sainsbury's operate convenience stores. As of early 2009, Morrisons is also the only one of the big four which does not offer an online grocery service.
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 (Hawick), BD (Bradford), HG (Harrogate), LS (Leeds), WF (Wakefield) and HD (Huddersfield).
Financial performance
| 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 |
Store formats
The format of most 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 rotisserie counter named Oven Fresh. There is a Pie Shop in most stores 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. Recently, moves have been made to combine counters in smaller ex-Safeway stores in the interests of efficiency - for example in Stevenston the pie shop has been combined with the Provisions counter, and in Erskine the Fishmongers has been combined with the Butchers counter. In original or fully converted stores, all counters are elaborately decorated to resemble a 19th century street scene. Also, in some stores (for example: Bangor, North Wales and Erskine) the Customer Service Desk has been combined with the Tobacco/Newspaper Counter and in some stores (for example: Denbigh, North Wales) there is no Customer Service Desk at all.
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.
Your bank at Morrisons: HSBC Bank operates a number of outlets in Morrisons. They offer a range of financial services, including an exclusive credit card and savings account.
Market share
, according to TNS Worldpanel, Morrisons is the smallest of the 'Big Four' supermarkets with a market share of 11.1%. Whilst Tesco, Asda and Sainsbury's saw increases in market share from July 2008, Morrison's saw a similar sized decrease of 0.2% in the same period. As for 2009 Morrisons has sold more and made more profit than any other of the top 4, and is ranked 3rd now.
| Supermarket | Consumer
Spend (£000s) | Market Share
August 2008 | +/- from
July 2008 |
|---|
| Tesco | 6,351,531 | 31.6% | 0.3% | | Asda | 3,410,431 | 17.0% | 0.1% | | Sainsbury's | 3,175,543 | 15.9% | 0.1% | | Morrisons | 2,233,137 | 11.1% | 0.2% |
Marketing and branding
Morrisons products were marketed under two slogans, "More reasons to shop at Morrisons" and "Quality and Value". The more reasons campaign was backed up with separate adverts explaining numbered "reasons". There are usually a large range of special offers in each store. Until recently the television advertising campaigns for Morrisons had featured the voice of actor Sean Bean but recently this has changed to a middle class and southern English sounding womans voice. This has now once again changed (see below). They are now fronted by former Liverpool defender and BBC Sport pundit Alan Hansen.
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. This advert was filmed at the south-wests flagship store at Cribbs Causeway Bristol (Store number 084)
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 Bests 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.
New store openings
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). They have also bought a former Co-operative Group 44,000 sq ft superstore at Welling in Bexley, which will re-open in the middle of 2009 after a major refit. They also have agreed to purchase a site for a store in Minehead, Somerset and are understood to be negotiating for a site in Wrexham, in North Wales (both these properties are from the local authorities). 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. They have acquired former Co-op Foodstores for opening in spring 2009 in Yiewsley, West Drayton, West London, Mansfield Woodhouse and Chester-le-Street. These are not included in the 38 former Somerfield/CGL stores that Morrisons announced it had agreed to buy from CGL. It has been reported that Morrisons are to buy a further former Somerfield Store in Crieff in Scotland and an independent supermarket (Coopers) in Westbury (Wilts).
Distribution
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, Burton Latimer 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.
Awards
2008
- Retailer of the Year
- Grocer of the Year 2008
2007
- Fresh Pasta Retailer of the Year
- Frozen Pizza Retailer of the Year
- Supermarket Greetings Card Retailer of the Year
- Fresh Flower Retailer of the Year
- Training Initiative of the Year
- Store Manager of the Year
- The Grocer Customer Service Award
- The Grocer Best Availability Award
- Grocer Own Label Excellence Awards
- Seafish Quality Award for all their Fresh Fish and Seafood counters
2004
- Store Manager of the Year
- Retail Product of the Year Award, Morrisons ‘Classic Walnut Dream Ice Cream’
- Retail Week – Retailer of the Year
- OLN Drinks Retailing Awards - Multiple Drinks Retailer
2003
- Fresh Pasta Retailer of the Year
- The Grocer Gold Award for Availability
2002
- Fresh Pasta Retailer of the Year
- Multiple Beer Retailer of the Year
2000
- Multiple Retailer of the Year, Retail Industry Awards
- Off Licence Retailer of the Year, Retail Industry Awards
- Multiple Retailer of the Year, Off Licence of the Year Awards
- Pizza Retailer of the Year
- Best Supermarket Fish Counter
- Gold Award, ‘Winning Business’ magazine's Retail Customer
- Service Survey – the only retailer to be awarded ‘Gold’
- Best Large Retailer, Disability Customer Service Awards
1999
- Fresh Produce Retailer of the Year
- Off Licence Retailer of the Year
See also
External links
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