Morrisons invests in food factories and pursues green agenda
In its annual results statement, the UK's fourth largest supermarket said: "In manufacturing, we are investing in automation and robotics for production lines and grading technology, improving product flow and raw material yield, and removing repetitive manual tasks.
"Examples include investment in automated grading and packing in our carrot and citrus sites. In distribution we are moving towards more depot automation with benefits including transport optimisation and reduced packaging."
Commenting on its acquisition of seafood wholesaler Falfish in Cornwall after the end of its financial year, Morrisons stated: "Falfish has been a supplier of high-quality fresh fish and shellfish to Morrisons for over 16 years and half of Falfish’s turnover is with Morrisons." The manufacturing investment would deliver improvements in range, quality and availability for customers, it said.
Net zero agriculture by 2030
Earlier this month, the retailer committed to net zero agriculture by 2030.
A spokeswoman for the retailer told Food Manufacture: "We have set a stretching target to reduce operational emissions by 33% by 2025, 53% by 2030, and net zero by 2040. We’re working with the Carbon Trust on science-based targets and our indirect or scope 3 emissions. This will cover products from the UK farmers directly sourced for our own brand products in beef, pork, lamb, potatoes, and eggs. 100% of our fresh meat is British, and we source as much British fruit and veg as possible.
Morrisons said it planned to improve the quality and nutrition of 6,000 own-label food products over the next two years, focusing on mid-tier and Best brands. This followed the recent launch of healthier food range Nourish, designed to provide different health benefits: good for bones, gut, heart, skin health or immunity.
Turning to responsible supply chain management, in 2020, the business said it had published details of all first-tier factories producing own-brand food and non-food products, as well as its Nutmeg clothing brand. The information included data relating to gender and access to worker representation.
Amazon
The retailer reported that its Morrisons on Amazon venture had expanded rapidly during the year, and was now available to millions of Prime members on the Amazon.co.uk website and app.
Orders were currently being delivered in and around 50 British towns and cities, with the service already accounting for more than 10% of sales in the majority of its stores where it is offered to customers. In addition, Morrisons has started supplying the new Amazon Fresh grocery store with a range of branded and own-brand items.
On Brexit, Morrisons said it continued to actively engage its key suppliers to reduce any impact to its supply chains and had maintained its focus on UK sourcing. It had increased the stock holding on a number of key lines to ensure availability for our customers. It had maintained Authorised Economic Operator status to enable streamlined border checks and had continued to work with suppliers and freight providers to identify alternative supply routes to avoid the busiest ports.
The numbers
Like-for-like sales excluding fuel and VAT for the retailer rose by 8.6% in the 52 weeks to 31 January against the previous financial year. However, total revenue remained broadly flat, up just 0.4% from £17.5bn to £17.6bn.
Pre-tax profit before exceptionals was £201m, less than half that of the previous year, because the company had chosen to waive business rates relief of £230m and had incurred £290m in COVID-19-related costs.
Morrisons extended its 10% discount on all items for NHS staff for the whole of 2021.
Chief executive David Potts said: “We must now look forward with hope towards better times for all, and we’re confident we can take our strong momentum into the new year, targeting profit growth and significantly lower net debt during 2021/22.”
