Company Vitae: Morrisons

Famous for its no-nonsense Yorkshire values, the supermarket has done well out of a downturn in which the chattering classes made thrift fashionable. But can it prosper in the upturn too?

by MT Staff
Last Updated: 28 Apr 2015

Formative years: William Morrison began selling eggs and butter on a stall in Bradford's Rawson market in 1899. He was no slouch, but his son Ken, who took over in 1952, turned out to be more than a chip off the old block. A pioneer of the self-service format, he opened his first supermarket in 1961. More stores followed across the north and north-west, and in 1967 William Morrison plc floated on the London Stock Exchange, hugely oversubscribed.

A shrewd businessman and born retailer, Ken pursued a low-key strategy based on intimate knowledge of his turf and self-financed growth. Investors loved his rock-solid track record on profits, customers loved his rock-bottom prices and staff were in awe of his legendary parsimony. It is said that he would personally police stores' bins to ensure fresh produce was not going to waste.

In 2004, the staid old Morrisons trolley suddenly executed a tyre-smoking U-turn with the audacious £2.9bn takeover of swanky southern rival Safeway. But integrating the 300-plus Safeway stores proved too much to chew on, and Morrisons' 37-year run of earnings growth came to an abrupt end. In 2005, it made a loss of £105m, leading to jibes that the upstart northerners - and their whippets - were being sent back home with their tails between their legs.

Recent history: Shareholders forced Sir Ken (knighted in 2000) to bring in the firm's first non-family boss in 2006, Dutch FMCG whizz Marc Bolland. Bolland revived the firm's brand and its financial fortunes, boosting gross margins from just 0.9% to 5.5%. So successful was he that in 2009 he landed Britain's plum retailing job, CEO of M&S.

Who's the boss? New boy Dalton Philips, ex-head of Canada's largest food distributor, Loblaw, took over earlier this year. Announcing a 14% rise in first-half profits in September, he hinted that the firm had been slow to grasp new ideas. (Morrisons is the only major UK supermarket not to sell online.) 'We are the fourth-largest retailer in the country, and if you are not going to be the biggest you are going to have to be the fastest,' he said. Expect Morrisons fruit bars, convenience stores, clothing and even - gasp - internet shopping in due course.

The secret formula? It is easyJet to Aldi/Lidl's Ryanair - good value without the grunge.

Unlike most UK rivals, Morrisons is vertically integrated, with its own factories for ready meals and even its own farms and livestock.

Proudest moment Getting yummy mummies into its stores alongside the slummy mummies.

Don't mention Retirement. Sir Ken collected his pipe and slippers in 2008 and is now life president. But he's one octogenarian we can't see spending his days at home in front of the telly.

Vital statistics
Stores: 425
Employees: 134,000
Turnover: £15.4bn
Pre-tax profit: £858m
Market share: 11.4%

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