Morrisons crashes to £176m loss
Supermarket chain Morrisons has crashed to a £170 million loss as it struggles to compete with its rivals by opening more convenience stores and launching itself online.
It will now aim to cut prices and take on the budget chains such as Aldi and Lidl as part of a £1 billion investment in a turnaround strategy for the next three years which it outlined today.
As part of the plans, it will sell off its Kiddicare and Fresh Direct businesses and stop building supermarkets over the next two years. Instead it will open 250,000 sq ft of its Morrisons M Local convenience stores a year.
Morrisons said it had made a £170 million loss before tax, compared to an £879m profit the year before. Turnover was down 2% to £17.7 billion.
Chairman Sir Ian Gibson 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 company has opened more than 100 M Local stores over the year after starting 2013 with just a dozen, and has just launched its online grocery store with Ocado, but set-up costs mean both are currently making a loss.
Morrisons, which employs 125,000 people, will also launch its own loyalty card – years after its rivals.
The latest figures include a £903 million charge including write-downs on the value of its stores and its 2011 acquisition of online children's wear retailer Kiddicare, which it now plans to sell in the wake of a poor financial performance.
And Morrisons warned that profits for the coming year would be half what had been expected - between £325m and £375m.
