Morrisons supermarket - financial report - page 10
Keywords: Morrisons,Finanial report,supermarket,performance of morrisons
By maya on 02/05/2008
Level: Master's degree (MA, MBA, MSc, MEng, MRes, MPhil etc)
Page Number: 10 of 14 pages: 1 2 3 4 5 6 7 8 9 10 11 12 13 14
It estimates that over 1000 offers in-store are provided in-store every week. Morrison’s aims to supply the best range of good quality products in a broad appeal, which includes Morrison’s own brand and meaningful sub brands.
From the standpoint of service, Morrison’s has obtained Grocer Gold Awards, and it continues its best customer service and best availability focus. In 2005, Morrison’s has invested a large mount in the conversion training for 56,000 employees.
Morrison’s store environment is unique market street. It stresses food first and foremost home and leisure complementary. The completion of Safeway conversions in 2005 generates incremental business for Morrison’s. It is estimated that 360 Morrison’s stores with Morrison’s prices are put into practice. Approximately 10.5m square feet under the Morrison’s brand, compared with 4.5m prior to the acquisition.
Morrison’s is traditional region based, particularly Lancashire and Yorkshire, in the North of England, where it has strong customer loyalty.
4.2. New Store Establishment
With its ambition to expand nationwide, Morrison’s initial ventures in the South have proved successful. As shown in Figure 11, Morrison’s has good performance on sales that increases from point of opening. Morrison’s growth has always been driven by new customers
finding the store, although it takes time to establish new stores. Safeway conversions are expected to grow in the long term.
From a perspective of shareholder, Morrison’s has repeatedly issued profit warnings since it bought Safeway store chain for £3bn. Due to the heavy costs incurred from Safeway integration, Morrison’s is suffering its pre-tax losses for the first half of the year is £73.7m in FY2005, compared with a £121.6m profit in the previous period. Exceptional costs are £118.8m, compared with £21.8m in the prior year. The largest component is the conversion costs of stores – rebranding, and refurbishing Safeway stores and retaining staff to apply Morrison’s service standard. Meanwhile, like-for-like sales in the core Morrison stores fell 5.2%, excluding fuel, in the third quarter. Chairman Sir Ken Morrison responds that “the conversion of Safeway stores to Morrison’s, and disposal of those that do not fit our operating model, has continued at pace. Converted stores saw a 23% increase in customers”.
4.3. Corporate Governance
In 2005, Morrison’s performance is under par. Subsequently, Morrison’s announces it is replacing Chairman David Jones with non-executive director Paul Manduca with immediate effect, confirming recent market speculation. Richard Pennycook takes up his post as Group Finance Director on 1st October and four independent
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