Morrisons to invest £19m in fresh food supply

Dalton Philips
Dalton Philips
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MORRISONS is investing £19m to speed up the supply of fresh produce as it tries to win back customers lost to rival supermarkets, The Yorkshire Post can reveal.

The Bradford-based grocer is keen to boost its fresh credentials over German discounters Aldi and Lidl, which have invaded its northern heartlands and stolen market share.

The investment will be spread across stores, manufacturing sites and logistics to improve shelf life and lastability and reduce food waste.

A spokesman said that “the goal is to ensure fruit and veg lasts longer for the customer”.

Fresh food items lose eight hours of life in the home for every hour left unchilled in the supply chain, he added.

The spokesman said £12m will be spent on chilling facilities in all stores and £7m on Morrisons’ produce facilities at Flaxby near Knaresborough, Cutler Heights in Bradford and Worsley in Salford.

The spending in stores will help develop a better system to identify all products that need to remain chilled.

All stores will get new chilling facilities to ensure they can refrigerate the right produce at the right time of year, added the spokesman.

He told The Yorkshire Post: “We have the best fruit and vegetables in the market, far ahead of the discounters.”

Alongside the investment, Morrisons has held ‘produce roadshows’ for greengrocers to help increase the focus on managing the condition of fruit and vegetables.

It has also introduced bins for customers to use if they think a particular item is past its best.

The £19m investment will be complete by the end of the year.

Chief executive Dalton Philips is trying to revive the fortunes of Morrisons, which has been hit hard by the rise of discounters and lags behind rivals in the fast-growing online and convenience store segments.

He has faced strong criticism from former chairman Sir Ken Morrison over his turnaround strategy.

The FTSE 100 company last month appointed Andy Higginson, the former Tesco finance chief, as chairman elect.

The retail heavyweight is due to start work in October as non-executive deputy chairman.

He will take over from chairman Sir Ian Gibson whi is standing down next summer.

Latest industry figures from Kantar Worldpanel show Morrisons’ sales fell by 3.8 per cent in the 12 weeks to June 22, with its market share down from 11.5 to 11 per cent.

Management is confident that its turnaround plan is working. The plans includes better management of costs and cash, improved stock handling, property disposals, investment in technology and simplifying a business model that has seven layers of in-store management.

The group is focusing on value, ease and freshness.

On the value front, the group is investing £1bn in price cuts over the next three years to win back customers.

Morrisons is also opening stores for longer and decluttering shelves to make it easier for its customers to shop.

It has replaced labels on hundreds of thousands of products to emphasise value, said a spokesman, which will enable customers to make price comparisons much more easily.

Progress on these fronts will be revealed next month: Morrisons is due to announce interim results on September 11.

The group issued a huge profit warning in March, compounding share price falls that have seen the stock lose a third of its value this year.