Supermarket chain Morrisons has been hit by a £176m pre-tax loss for the year ended 2 February 2014 as it invested £903m into new convenience stores, an online platform and IT systems.
Like-for-like sales fell 2.8 per cent; a further fall of last year‘s l-f-l drop of 2.1 per cent. Turnover fell 2 per cent to £17.7bn
Chief executive Dalton Philips said the biggest challenge that Morrisons faced was that there has been a fundamental change in how consumers view discounters.
“They are no longer going to them out of necessity. The perception has changed and there is a new price norm,” he said. “The rules have changed and we must change too. It is absolutely critical that we begin winning again in our core supermarkets. To do that we must compete on price.”
The grocer opened 18 new supermarkets in the year and said its IT system development was “progressing well.”
Morrisons has seen its market share squeezed by rivals this year and only just started delivering online groceries in January this year with Ocado.
However, it launched 6,500 own brand products and completed its own label conversion paving the way for cheaper prices for consumers.
“Morrisons has fallen dangerously far behind in the two key growth areas in food retailing – online and convenience stores,” said John Ibbotson, director of Retail Vision.
Phil Dorrell of Retail Remedy said the grocer was playing catch-up in all areas of its business.
Chairman Sir Ian Gibson said it had been a “disappointing” year for Morrisons and confirmed Morrisons would exit non-core activities such as struggling Kiddicare which it bought for £70m three years ago.