BRITAIN’S fourth largest supermarket Wm Morrison yesterday pledged that by 2015 it would have the technology systems, online presence and convenience stores to have significantly closed the gap on its larger rivals.
The company, which trails Tesco, Wal-Mart’s Asda and J Sainsbury in annual sales, has seen profits and market share dented by its late entry into the online grocery and convenience store markets – which are growing in Britain at about 16 per cent and 20 per cent a year respectively.
Presenting a strategy update Dalton Philips, chief executive since March 2010, defended his record.
“I’ve only been here three years. There was no plan for online, there was no plan for convenience and we had systems which were 20th century,” he said.
He said three years on, the firm was getting “21st century” systems, including for accounting, supply chain management and automated cash-handling, through a £300m investment. It was aggressively opening “M local” convenience stores, with a target of 100 by the end of the year, he said, and had secured £500m of online grocery capacity “at a stroke” through a tie-up with Ocado.
Tesco has more than 1,700 convenience stores, by comparison, and Sainsbury over 500 and having been selling groceries online for over a decade.“We found ourselves five, even 10 years, behind. While we have made real progress in closing the gap, we are not there yet, but we will have done so by 2015,” Philips said.
Morrisons agreed in May to invest over £200m in a 25-year deal with online grocer Ocado that will see the firm start home deliveries by the end of the year.
City A.M. Reporter