Morrisons

Sector: Food, drug and mass retailers Country of operation: UK Key product categories: Apparel, food and beverage, fuel, health and beauty, and general merchandise Annual Metrics [caption id="attachment_138931" align="aligncenter" width="700"] Fiscal year ends January 30 of the same calendar year
*Excluding fuel
**Trailing twelve months ended August 1, 2021[/caption]   Summary Morrisons was founded in 1899 and is headquartered in Bradford, England. It operates supermarkets and an e-commerce website, offering products in the clothing, fresh food and beverage, groceries, health and beauty, home and garden, pet, and toys categories. Morrisons also has a strong manufacturing business, reporting that it makes more than half of the fresh food it sells in stores. The company offers its products and services under the brand names Best, Eat Smart, Food to Go, Free From, Morrisons, Nutmeg, Price Crunch and Way Down. As of January 31, 2021, the company operates 497 supermarkets, 19 manufacturing sites and eight distribution centers. Company Analysis Coresight Research insight: Morrisons is the smallest of the UK’s “Big Four” supermarket chains, operating fewer than 500 stores. Nevertheless, Morrisons’ fresh food manufacturing capability, supported by its vertically integrated supply, provides a key point of differentiation from its competitors. After struggling to generate profits for a number of years, Morrisons made a significant recovery following the 2015 launch of its “Fix, Rebuild and Grow” strategy. This strategy refocused the company on its heritage as a fresh food manufacturer, and its aims include rationalizing and remodeling its store estate and maintaining competitive pricing. The plan enabled Morrisons to recover from an annual loss of £792 million ($1.1 billion) in fiscal 2015 to an operating profit of £254 million ($348 million) in fiscal 2021. In October 2021, US private-equity firm Clayton, Dubilier & Rice (CD&R) took control of Morrisons after its shareholders approved a £7 billion ($9.5 billion) takeover bid. The company was delisted from the London Stock Exchange (LSE) later in the same month, marking the end of the supermarket’s 54-year run as a publicly listed company. Morrisons’ buyout will see just two major UK grocery retailers remaining as public companies: market leader Tesco and second-place Sainsbury’s.

Tailwinds	Headwinds
Morrisons’ role as a food manufacturer, supported by its strong distribution network and vertically integrated supply chain Opportunities to boost sales growth under its ongoing Fix, Rebuild and Grow strategy Strong wholesale business, which is on track to achieve its £1 billion annual sales target Pandemic-driven shifts in consumer spending from food-service outlets to grocery retail	Macroeconomic headwinds, including the economic recession in the UK and the resultant drop in purchasing power, as well as uncertainties surrounding Brexit Heightened competition from other supermarket chains and discounters such as Aldi and Lidl Net debt of £3.2 billion at the end of fiscal 2021, an increase of 29% from the end of fiscal 2020

  Strategy Morrisons launched its Fix, Rebuild and Grow strategy in 2015 to address problems, strengthen the brand and rebuild the company. In 2021, the company updated its seven priorities to reflect the increased spirit of teamwork, community and support since the start of Covid-19. 1. Be more competitive

• Improve relative competitiveness for customers and help them save money by offering the best quality products at the best possible prices.

2. Serve customers better

• Incorporate customer feedback into changes in the business.
• Make investments to improve customer service.

3. Find local solutions

• Improve customer store visits by stocking local products, tailoring ranges to different demographics and making store adaptations.
• Increase number of local products from growers, farmers, fishermen and other food suppliers.

4. Simplify and speed up

• Simplify and accelerate processes to create a leaner, more efficient business that is more responsive to customers.

5. Digitalize to provide convenient services

• Use digital technology to provide increasingly easy, accessible and convenient services for customers—such as Scan and Go technology, digital shelf edge labels and contactless payment.

6. Take pride in hygiene

• Maximize cleaning hours and cleaning stations across its stores, depots, manufacturing sites and offices.
• Invest in extra touch cleaning, sanitizer dispensers and extra staff responsible for hygiene.

7. Create and scale for profitable growth

• Pursue new opportunities and swiftly scale ideas that work.
• Develop a food-to-go range though its new takeaway “Market Kitchen” concept, first introduced in February 2021.
• Remodel and improve existing store real estate to improve the shopping experience.

Revenue Breakdown (FY21)     Company Developments

Date	Development
October 19, 2021	Morrisons shareholders approve £7 billion ($9.5 billion) takeover bid by private-equity firm CD&R, with 99.2% of the shareholders voting in favor of the deal.
September 30, 2021	Morrisons partners with Deliveroo, to launch the latter’s rapid grocery delivery service Deliveroo Hop in Central London.
July 3, 2021	Morrison accepts a £9.5 billion ($13.1 billion) takeover offer by a private consortium led by Softbank-owned Fortress Investment Group.
May 14, 2021	Morrison announces that it has invested £16 million to prepare its cafés for reopening, updating décor and increasing safety measures.
April 21, 2021	Morrison introduces a private-label range of plastic-free shampoo and conditioner bars with recyclable packaging.
March 2, 2021	Morrisons acquires Cornwall-based seafood business Falfish for an undisclosed sum.
February 11, 2021	Morrisons launches a new store in Camden, London, that will include a fresh-food takeaway feature called Market Kitchen.
November 9, 2020	Morrisons announces it has restarted its food takeaway service at all of its 404 cafés nationwide, with the onset of the second UK lockdown.
October 1, 2020	Morrisons announces that it will extend its commitment to pay smaller suppliers immediately until the end of January.
September 30, 2020	Morrisons announces that it will recruit for over 1,000 permanent jobs to pick and pack customer orders received via Amazon.co.uk and Amazon Prime Now.
September 9, 2020	Morrisons announces plans to acquire outdoor plant supplier Lansen Nursery.
August 19, 2020	Morrisons and Amazon jointly announce the launch of “Morrisons on Amazon” store on Amazon.co.uk.
June 29, 2020	Morrisons opens a new 5,400 square foot standalone Nutmeg and Home store in Bolsover, England.
May 11, 2020	Morrisons and Amazon announces the expansion of its Prime Now grocery delivery service across London and other major cities in the UK.
April 7, 2020	Morrisons partners with Deliveroo to offer same-day grocery delivery from more than 130 Morrisons’ stores.

  Management Team

• David Potts—CEO
• Michael Gleeson—CFO
• Trevor Strain—COO

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Source: Company reports