Morrisons to launch online food business
16 Mar 2013
UK retailer Morrisons plans, what it calls a ''distinctive'' and ''unmistakable'' online food business, with internet grocer Ocado in line for providing the technology for the venture.
Fifty-two years after it opened its first supermarket in Bradford, Morrisons chief executive Dalton Philips confirmed that the food retailer would follow its rivals and sell groceries online.
Philips' announcement came even as he described as ''unsatisfactory'' results for the last 12 months. The retailer suffered a 2.1-per cent fall in sales in the "like-for-like" segment in the year to 3 February and a 7.2-per cent drop in pre-tax profits to £879 million.
Morrisons' sales have trailed those of its rivals in the past year and Philips blamed this to lack of an online business, the company's patchy footprint in the fast-growing convenience store market, as also a failure to promote the company's points of difference.
Meanwhile, Morrisons plans to lead an advertising campaign in the Saturday night TV show Ant & Dec to address the issue promoting the supermarket chain as the UK's second biggest manufacturer of fresh food.
The retailer had also acquired 62 sites for convenience stores from the administrators to Blockbuster, HMV and Jessops and plans to open 100 of its ''M Local'' stores by the end of the year, 40 per cent higher than initially planned.
The retailer said it was in discussions with the online grocer Ocado to license "intellectual property and operating knowledge'', at the same time though, Ocado clarified the talks did not involve Morrisons either buying a stake in its business or launching a full takeover.
The company admitted weekly footfalls declined by 400,000 and saw its strongest growth in London and the south-east, where it operated the fewest stores.
Meanwhile, the most recent industry data revealed that Morrisons lost market share in a growing sector, down to 11.8 per cent in the 12 weeks to 17 February, as against 12.4 per cent a year which made it the only major supermarket to lose market share, according to Kantar Worldpanel.
In its full-year results to 3 February, the company admitted, "Our below-market sales performance was disappointing. While we are at a structural disadvantage in that we do not yet have a meaningful presence in either convenience stores or in online, the two fastest-growing sectors of the market, we did not perform as well as we should have."
