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Monisons bids for recovery
Page 14
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Despite unveiling the first loss in its history, supermarket Morrisons may have some good news for the sector. Dave Harris reports.
SUPERMARKET GROUP Morrisons is planning to open a new distribution centre in the South-West of England, just a few months after shutting down depots in Bristol. Cheshire and Kent.
Earlier this year the troubled group announced the redundancy of 2,500 staff, including some 700 drivers, as a result of the closures (CM 12 January).
But chief executive Bob Stott indicated at its annual results announcement that a new depot would be necessary because its present network was -skewed" towards the North.
Stott says the £70m centre will be much more efficient than the closed, former Safeway depots. which were "very tired" and "high-cost". Morrisons is planning a threeyear recovery period after unveiling the first loss in its 107-year history last week. The chain's pre-tax loss was £.312.9m, compared with a profit of £193m for the previous year.
The main reason cited for the company's fall into the red was the cost of integrating the Safeway chain,which Morrisons bought for £3bn in 2()04.
The group's three-year plan includes saving £30m on its distribution costs and £50m by cutting staff hours, and raising its gross margin by 0.9%.
Morrisons has already recorded an improvement in its business in 2006. with like-for-like sales up by 3.2% for the seven weeks ending on 19 March.