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Wm Morrison Supermarkets 

“Market Cap $8.19 B As of May 2014

At a Glance
  • Industry: Food Retail
  • Founded: 1899
  • Country: United Kingdom
  • CEO: Dalton Philips
  • Website: www.morereasons.co.uk
  • Employees: 128,705
  • Sales: $27.71 B
  • Headquarters: Bradford
Forbes Lists

#987 Global 2000

  • #337 in Sales
  • #1159 in Assets
  • #1292 in Market value
Profile

WM Morrison Supermarkets Plc operates supermarket chains. It focuses mainly on food and grocery items. The company through its subsidiaries engages in the manufacturer and distributor of fresh food products, fresh meat process, grocery retailer, and property development. It offers a range of good s include both branded and own label products. WM Morrison Supermarkets was founded in 1899 and is headquartered in Bradford, the United Kingdom.

“Wm Morrison Supermarkets History

Founding

The company was founded by William Morrison in 1899 who started the business as an egg and butter merchant in Rawson Market, Bradford, England, operating under the name of Wm Morrison Limited.

His son Ken Morrison took over the company in 1952, aged 21. In 1958 it opened a small shop in the city centre. It was the first self-service store in Bradford and 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.

Publicly traded company

In 1967 it became a public limited company listed on the London Stock Exchange.

Acquisition of Safeway

In 2004 Morrisons, which operated mainly in the north of England, acquired Safeway, a British supermarket chain which owned 479 stores, mainly in Scotland and the south of England. The acquisition quickly ran into difficulties caused in part by the outgoing management of Safeway changing their accounting systems just six weeks before the transaction was completed. The result was 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 25,000 sq ft (2,300 m2) 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, but this was reduced to 50 after one Safeway store inSunderland was destroyed by fire and the lease ended on another in Leeds city centre. John Lewis Partnership purchased 19 to be part of its Waitrose chain, while 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 has since done so with its M Local stores). Further to this policy decision, it was announced in late 2004 that the 114 smaller ‘Safeway Compact’ stores would be sold off to rival supermarket chain Somerfield in a two-part deal worth £260.2 million in total.

In Northern Ireland Morrisons sold the Safeway stores to ASDA. This included a store in Bangor that opened after the Morrisons takeover.

One of the largest single purchases in 2005 was that of five stores by Waitrose. On 18 July 2006, a further six stores from the ‘Rump’ format were sold to Waitrose, including the former Safeway store in Hexham, Northumberland, which became the most northerly Waitrose branch in England.

In May 2005, Morrisons announced the termination of Safeway’s joint venture convenience store/petrol station format with BP. Under the deal, the premises had been split 50/50 between the two companies. Five sites were subsequently sold on to BP, while Morrisons sold the rest of its sites to Somerfield andTesco, which both maintain a presence in this market sector – Somerfield stores later rebranded to the The Co-operative Food fascia.

Morrisons also sold Safeway’s Channel Islands stores, in Guernsey and Jersey, to CI Traders where they continued to trade under the Safeway brand name, despite selling products from 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 The Co-operative Food. The Gibraltar store was originally marketed for sale, but has now been converted under the ‘Rump’ format. In November 2006, plans were submitted for the extension and redevelopment of the store in order 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 has since been sold to upmarket rival Waitrose, whilst Warrington was sold to frozen food rival Iceland. Part of the Bristol depot has been sold off to Gist. The store conversion process was completed on 24 November 2005 when the Safeway fascia disappeared from the UK.

Retirement of Sir Ken Morrison

On 13 March 2008 Sir Ken Morrison retired as Chairman after 55 years at the company and was made Honorary President.

Purchase of former Co-op and Somerfield stores

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 fascia. These new stores were the first of more than 100 identified by Morrisons for expansion into smaller supermarkets as it aims to have a store within 15 minutes of every UK home.

Multi-channel diversification

In January 2010, Morrisons appointed Dalton Philips as its new Chief Executive. He has led Morrisons into its introduction of online shopping and convenience stores, as well as updating its original estate into a more contemporary theme through the refurbishment of stores as “Fresh Format” (originally “Store of the Future”).

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 childrenswear brand ‘Nutmeg’ into 85 stores on 21 March 2013. Speculation is that Morrisons is investigating a launch into adult clothing during 2014.

Throughout December 2012 the supermarket chain saw a 2.5 per cent decline in sales. This led the supermarket chain to label their financial performance for the Christmas period 2012 as being a disappointing one, although the supermarket still claimed that they were on track to meet their targets.

Morrisons Christmas 2013 like-for-like sales declined by 5.6%. The company blamed its lack of an online shopping operation (which only launched in January 2014), despite both Aldi and Lidl doing well – both of which do not have online shopping operations.

As of February 2014, after four years, this strategy has had mixed success.

Potential private equity takeover bid

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 extremely unhappy about the company’s disastrous financial performance, and the corporate strategy being undertaken by Dalton Philips.

Morrisons restructuring plans

In June 2014, Morrisons announced that there are plans 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. However, these cuts would primarily effect department manager and supervisory positions. Morrisons 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. In turn, the depot in Kemsley, will be immediately leased back to the supermarket chain on a 25-year agreement with a £5.4 million rental fee per annum.”

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “morrisons