Morrisons in talks with Ocado for online venture
Morrisons will be selling groceries online after sales fell 2.1% in the last year.
The retailer, which announced its annual results this morning, confirmed it is in discussions with Ocado with the aim to create a joint venture after a “tough trading year”.
Morrisons said there was no certainty an agreement would be reached with the online grocery business and the supermarket’s decision to enter the online grocery market was “not dependent on the outcome of these discussions”.
Announcing its annual results, Morrisons said it had made “good strategic progress” and was laying foundations for future growth, particularly in online, convenience stores and investment in its supply chains.
Turnover for the fourth largest supermarket in the UK rose 3% to £18.1bn in the year to 3 February 2013.
However, underlying pre-tax profit was down 4% to £901m.
Chief executive Dalton Philips blamed falling sales on sustained pressure on consumer spending and said Morrisons’ sales performance was “not as good as it should have been”.
“Recent events have underlined why it’s so important that we tell our customers how and why we’re different and what our vertical integration really means for them,” said Mr Philips.
“Food quality, provenance and the issue of trust are at the forefront of consumers’ minds and these are all areas where Morrisons has something genuinely different to offer.”
In its annual results statement Morrisons said: “Over the past year we have increased our support for British dairy farmers and invested further in research into the long-term viability of British farming.”
With half the fresh produce sold in store processed in Morrisons’ own factories, the retailer said it had spent £200m in further integrating the supply chain in the past three years.
Some of this money had been spent on acquiring a Vion meat packing plant, Farmers Boy of Deeside, in the first half of 2012, which will enable the supermarket to extend its range of categories produced through the site, said Morrisons. Expansion had also begun on its Colne abattoir to facilitate further pork processing.