Morrisons
Wm Morrison Supermarkets Limited, trading as Morrisons, is the fifth largest supermarket chain in the United Kingdom. As of 2021, the company had 497 supermarkets across England, Wales and Scotland, and one in Gibraltar. The company is headquartered in Bradford, England.
Founded in 1899 by William Morrison, it began as an egg and butter stall in Rawson Market, Bradford. Until 2004, its store locations were 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, Wales and Scotland. As of February 2021, Morrisons employed 110,000 employees and served around 11 million customers each week.
The company was listed on the London Stock Exchange until it was acquired by private equity firm Clayton, Dubilier & Rice in October 2021. Many changes were made after the takeover, and the company is struggling financially.
Morrisons is the fifth largest supermarket in the United Kingdom by market share, overtaken for fourth place by Aldi in September 2022.
History
Founding
The company was founded as Wm Morrison Limited in June 1899 by William Morrison, who started the business as an egg and butter merchant in Rawson Market, Bradford, England.His son Ken Morrison took over the company in 1952, aged 21. In 1958, Morrisons 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.
In 1967, Morrisons became a public limited company listed on the London Stock Exchange.
Safeway
In March 2004, Morrisons acquired Safeway, a British supermarket chain which owned 479 stores, giving Morrisons a larger presence in southern England. The company was purchased for £3.3 billion, comprising 1 new Morrisons share, plus 60 pence in cash for each Safeway share held. The acquisition quickly ran into difficulties caused in part by changing the accounting systems six weeks before the transaction was completed, leading to a series of profit warnings being issued by Morrisons, poor financial results and a reversion 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 Morrisons own-brand products began to appear in Safeway stores.
Originally 52 shops were to be compulsorily divested after the takeover. Two closed for other reasons, John Lewis Partnership purchased 19 to be part of its Waitrose chain, J Sainsbury plc purchased a further 14, and Tesco bought 10 in October 2004. At the time Morrisons chose not to move into the convenience store sector, although it later did so with its [|M Local] stores. In accordance with this policy decision, 114 smaller 'Safeway Compact' stores were sold to rival supermarket chain Somerfield in 2004 in a two-part deal worth £260.2 million.
In 2004, the first Morrisons store in Scotland was officially opened in Kilmarnock. In Northern Ireland Morrisons sold the Safeway stores, and a store in Bangor that opened after the Morrisons takeover, to Asda. Waitrose purchased five stores in 2005, followed by six more on 18 July 2006, including the former Safeway store in Hexham, Northumberland, which became England's most northerly Waitrose branch. In May 2005, Morrisons announced the closure of Safeway and BP joint venture convenience store/petrol station. Under the deal, the premises had been split 50/50 between the two companies.
Morrisons also sold Safeway's Channel Islands stores, in Guernsey and Jersey, to CI Traders where the stores continued to trade as Safeway, although the products they sold carried the brand names of chains such as Iceland. In 2011, Sandpiper CI/CI Traders sold the Channel Island Safeway stores to Waitrose, and the Safeway brand disappeared from the Channel Islands. On the Isle of Man, the Douglas store was sold to Shoprite and the Ramsey store was sold to The Co-operative Food. The Gibraltar store was originally offered for sale, but was ultimately converted. In November 2006, plans were submitted for the extension and redevelopment of the store 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 was later sold to upmarket rival Waitrose, and the Warrington one to frozen food rival Iceland. Part of the Bristol depot was sold to Gist.
The store conversion process was completed on 24 November 2005 when the final Safeway fascia disappeared from the UK.
Morrison family step down
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 Morrisons' "northern" format did not work as well in the south. To reinvigorate its new national image, Morrisons appointed Dutchman Marc Bolland, the chief operating officer of Heineken, as its new Chief Executive.On 13 March 2008, Sir Ken Morrison retired as chairman after 55 years at the company, and was made Honorary President.
Expansion and partnerships
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 name. These new stores were the first of more than 100 identified by Morrisons for expansion into smaller supermarkets, with the aim of having a store within 15 minutes of every UK home.Marc Bolland departed to become the CEO of Marks & Spencer in December 2009, and Dalton Philips was appointed as his replacement in January 2010.
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. The Peacocks section was rolled out into other stores before launching its own children's-wear brand 'Nutmeg' into 85 stores on 21 March 2013.
The first Morrisons M local store opened in Ilkley, Yorkshire, in 2011. All M Local stores were later rebranded as the short-lived "My Local" chain in 2015.
In December 2012, a television advertising campaign which showed a dog being given pieces of Christmas pudding was criticised by the British Veterinary Association and the Kennel Club, as raisins are harmful to dogs. Morrisons said that veterinarian advice they received said that there would be minimal risk.
In May 2013, Morrisons formed a partnership with Ocado to use its technology systems and distribution infrastructure to help launch its own online service.
Restructuring
Richard Pennycook, who had joined Morrisons in October 2005, was replaced as Chief Financial Officer at Morrisons in June 2013 by Trevor Strain, previously Finance Director Corporate.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 unhappy about the company's financial performance, and Dalton Philips's corporate strategy.
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 criticised Dalton Philips's approach. Morrison's nephew Chris Blundell, who controls most of the remaining family stake in the supermarket, agreed, telling told the board it needed rescuing, and welcomed the decision by chairman Sir Ian Gibson to leave the business in June 2015.
In June 2014, Morrisons announced that plans had been put in place to cut 2,600 jobs as a result of changes to its management structure. Morrisons stated that it had trialled the new structure and believed that better performance was achieved via these methods. These cuts would primarily affect department manager and supervisory positions. Morrisons claimed they 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. The depot in Kemsley was to be immediately leased back to the supermarket chain on a 25-year agreement, for a rent of £5.4 million per annum.
Following a 3.1% drop in like-for-like sales in the Christmas 2014 trading period, Sir Ian Gibson stood down six months early and was replaced by former Tesco chief financial officer Andrew Higginson at the end of January 2015. On 25 February 2015, Morrisons named former Tesco director David Potts as its new chief executive. Dalton Philips and five other executives also left the company in March 2015.
Morrisons also announced the closure of ten loss-making stores in Cramlington, Accrington, Ravensthorpe, Bransholme, Telford, West Bromwich, Wallasey, Newton le Willows, Rugby and Crawley. 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.
In June 2015, Morrisons cut the price of 200 'everyday items' by up to 33% The store chain's like-for-like sales had fallen by 2.9% in the first three months of 2015, after falling 2.6% in the last three months of 2014. The company responded by deciding to 'simplify' its head office in Bradford at the cost of 720 jobs.
In September 2015, Morrisons announced the sale of its 140 M Local stores to Mike Greene and Greybull Capital, to be re-branded My Local, for £25 million and that it planned to close 11 supermarkets, with a reported 900 jobs lost. In January 2016 Morrisons bosses announced that a further 7 stores would be closing to help optimise their existing assets and address areas of underperformance.
Following a well-publicised crash in UK milk prices in November 2015, Morrisons launched a variety milk labelled 'For Farmers', with a large Union Jack on the label, claiming an extra 23p per 4-pint bottle would to be given to farmers – 10p per litre. Following complaints, Morrisons admitted that the extra money was actually paid to the supplier of the milk, Arla Foods, to be divided among several countries, with only a fifth of the 23p going to UK farmers. Morrisons later changed the scheme in 2017 such that the total additional payment went directly to a selected group of 300 British farmers. A smaller group of 50 farmers were tasked with supplying the range, with additional welfare standards applied to the production of the milk.
From March 2020, the company aimed to cut down 3,000 management roles, and created 7,000 shop-floor jobs as part of its restructuring plan.
In December 2020, Morrisons was criticised for retaining Paula Vennells on its board, despite her role as CEO of the Post Office during the subpostmasters' scandal and criticism of her leadership there as "both cruel and incompetent" by a Conservative peer and various MPs. Vennells eventually left her role as a non-executive director on 26 April 2021.