Aldi overtakes Morrisons to become fourth biggest supermarket

[dutchman]

Morrisons owner CD&R hires ex-Tesco CEO Dave Lewis as adviser



Morrisons owner private equity firm Clayton Dubilier & Rice (CD&R) has hired former Tesco boss Sir Dave Lewis as an operating adviser as it looks to strengthen its consumer and retail team.

His role includes supporting the supermarket owner by sourcing new investment opportunities and supporting its portfolio of companies across Europe.

Lewis, who is currently chair of GSK’ consumer health spinoff Haleon, has spent the majority of his career at consumer goods giant Unilever.

However, he was previously the chief executive of Tesco between 2014 to 2020 where he led a successful turnaround of the business following an accounting scandal.

CD&R co-president Dave Novak said: “Dave is an exceptional executive and highly respected leader. His reputation for innovation, value creation and growth is outstanding.

“I believe his knowledge and experience, built up over three decades, will be of great value to CD&R funds as we consider new investments and continue to build stronger, more sustainable businesses across Europe.”

Lewis added: “I believe the depth of CD&R’s operating and investment expertise across the consumer goods, retail, and other sectors in Europe to be incredibly strong.

“I look forward to working with CD&R’s investment and operating teams, as well as the management teams of the firm’s portfolio companies to identify investment opportunities, support strong performance and create durable businesses fit for the future.”

[dutchman]

Morrisons: Union ‘angry and disappointed’ by pension changes



Retail trade union Usdaw is “angry and disappointed” with Morrisons’ refusal to consider alternative proposals for pension scheme reform.

Usdaw criticised the supermarket‘s latest confirmation of changes, which include a switch in contribution percentages from employers and employees.

Currently, the pension scheme sees Morrisons provide 5% and its employees 3%, yet the grocer has revealed it will switch this to 3% from the employer and 5% from its workers.

Other changes include the supermarket readjusting life cover and eliminating company-wide service milestone bonuses.

Despite some improvements in other staff benefits, Usdaw reiterated it was disappointed that Morrisons had not accepted any counter proposals and vowed to explore all available measures to persuade management to reconsider and present a fairer offer.

Usdaw national officer Darren Mathews said: “After a series of consultation meetings with Morrisons, it is deeply regrettable that they are pressing ahead with proposals to seriously reduce the terms of the pension scheme.

“The company claims that these changes are due to upcoming Government reforms, despite the fact that there has been no actual timetable announced for these changes.

“As such we do not believe that Morrisons need to make these changes and we are not aware of any other retailers who are looking at similar reforms.

“While Morrisons are making some minor improvements to other staff benefits, the loss of the Long Service Award on every fifth anniversary will negatively impact thousands of staff. This is a change that we were neither consulted on nor advised of ahead of the announcement.

“We are angry and disappointed that Morrisons has not accepted any of our counter proposals and we will be looking at every measure available to us to persuade management to review their position and come back with a fairer offer.”

Retail Gazette has contacted Morrisons for comment.

The place is finished!

[dutchman]

Morrisons sells forecourts to MFG in £2.5bn deal



Morrisons has sold 337 of its petrol forecourts to MFG in a £2.5bn deal, as it takes a minority stake in the petrol station giant.

The deal forms “a new strategic partnership” between the two companies, which are both owned by private equity firm CD&R, and will see Morrisons take around a 20% stake in MFG and enter into commercial and supply agreements with the business.

The supermarket will use the proceeds of the sale to “fund further investment in the grocery and food making businesses, as well as significantly strengthening the business’s capital structure”.

The grocer is expected to use some of the funds to pay down part of its £5.17bn debt pile.

The transaction follows a similar deal done by Asda, which bought fellow Issa brothers-owned business EG Group’s UK and Ireland forecourt business last September.

MFG plans to use the Morrisons sites to develop a rapid EV charging business, with 800 ultra-rapid chargers planned in the first five years.

The pair said “significant synergies” would be created through the transaction, which it insisted would help both UK motorists and shoppers at the pump and in store.

They promised “value for money” supermarket fuel on the forecourts and “significant investment” to expand and improve the convenience retail offer at the sites.

Morrisons will continue to supply food and groceries across the 337 forecourts, as it looks to expand its supply across the MFG estate over “the medium term” through its wholesale operation.

The pair confirmed that no redundancies will be made following the transaction and every forecourt worker will have an in-store position on the same pay and employment at MFG.

CD&R had previously agreed to sell 87 MFG sites in 2022 in order to get the green light from the CMA for its £7bn Morrisons acquisition.

[dutchman]

Distraction much?

Since both are owned by the same, bankrupt, failed US company, I fail to see how this is in any way a sale? More of an accounting trick.

Also:

MFG plans to use the Morrisons sites to develop a rapid EV charging business, with 800 ultra-rapid chargers planned in the first five years.

They needn't worry about that since neither Morrisons nor electric cars will be around in five years!

[dutchman]

Morrisons shoppers to join board meetings as chain seeks revival



Morrisons is inviting shoppers to board meetings and holding monthly customer roundtables in stores as part of a strategy to “start a new chapter” for the struggling supermarket chain under its new boss.

Rami Baitiéh, who took over from David Potts as the chief executive of Morrisons in November, said he would announce new plans for the business in March, adding that “listening to customers and colleagues will show us the way”.

“We are developing plans to reinvigorate, refresh and strengthen Morrisons and to start a new chapter,” said Baitiéh, the former head of the France’s Carrefour chain who has a reputation as a turnaround expert.

“Since the pandemic, Morrisons has not been on peak form. Our market share has slipped slowly and consistently and [underlying] sales have been below the pack for a while,” he said.

Under a new regime intended to draw back shoppers, Baitiéh said Morrisons would not have any major meetings without the presence of a customer panel that could offer insights into where it could improve.

The customers will give views on pricing, service and products at the chain asking questions of the board, and being asked their opinions by executives.

Baitiéh said the voice of store managers would also be given more emphasis within the business to gain insight from the shop floor. He said all stores would have monthly shopper roundtables and those that were particularly “challenged” would host one every week.

“We are beginning to have a new mindset in the company, a high performance culture,” he said.

Baitiéh said there was “work to do” on improving quality, price, ranges and profit margins, but he was “confident that Morrisons has the people, the talent, the assets and the desire to chart a bright future in UK grocery”.

[dutchman]

Meanwhile on Planet Earth...

[dutchman]

More hot air:

Morrisons promises to match or beat Aldi and Lidl prices on 200 products – but it doesn’t mean price cuts



Morrisons has announced it will match the price offered at Aldi and Lidl on hundreds of its products.

Trying to win back customers from the German challenger supermarkets, Morrisons will check its prices on selected products against the rivals twice a week.

From today, Morrisons will mark more than 200 products on its shelves as being the same price or lower as the two discount stores.

This only marks a sliver of the products on sale at the supermarket, however.

Morrisons said it selected the items in the price match guarantee as they were things shoppers buy a lot of.

Shoppers shouldn’t expect price cuts for most of the products included in the price match though, as most are already the same price as Aldi and Lidl, according to the retailer.

The supermarket chain said: “The vast majority of the products which are now Price Matched to Aldi and Lidl were already the same price, today’s announcement is about reassuring customers and helping to change perception.”

The number of customers shopping at Aldi and Lidl over traditional supermarkets has increased over the past 10 years.

A decade ago, Morrisons had 11.3 per cent of the grocery market, with the most recent data from Kantar showing it had 8.8 per cent.

Meanwhile, Aldi’s market share has risen from 4.1 per cent to 9.3 per cent over the same period, while Lidl’s has grown from 3.1 per cent to 7.5 per cent.

Morrisons’ chief customer and marketing officer Rachel Eyre said: “We want to reassure our customers that we have hundreds of products that are the same price or cheaper, with the quality they’ve come to expect from us, than those available at Aldi and Lidl which is why we have launched our new Price Match.

“We hope this new campaign will bring our quality and value into even sharper focus for our customers.”

Believe it when I see it!

[dutchman]

The only change I noticed today was you no longer have to buy two multi-packs of crisps to get the same price as Aldi. Neither is particularly good value.

Also the "Savers" range is displayed more prominently now, previously you had to hunt around to find them.

[dutchman]

Here is an example of Morrisons' new price campaign:

Frozen ready-meals:

Was: "Any four items for £6"

Now: "Any three items for £5"

That's a saving of £1!*

*As recorded by the from the government's price survey team.

[dutchman]

Morrisons sheds more than 8,800 jobs during another year of £1bn-plus losses



Morrisons has revealed it cut more than 8,800 jobs last year – almost 8% of its total workforce – while making a loss of more than £1bn after a debt-fuelled private equity takeover in 2021.

The UK’s fifth largest supermarket chain reported total finance costs of £735m, up from £590m the year before, according to its latest annual accounts for the year to 29 October.

It was the second consecutive year in which Morrisons lost more than £1bn, after reporting a loss before tax of £1.5bn in 2022.

The supermarket chain has struggled to compete against the rapidly expanding discounters Aldi and Lidl and a resurgent Tesco and Sainsbury’s. Aldi overtook Morrisons to become the fourth largest supermarket in the UK in 2022.

The accounts show Morrisons’ losses rose despite action to reduce costs, including cutting store staff numbers by almost 7,000 and removing more than 780 jobs in its distribution network, more than 730 roles in its manufacturing facilities and almost 400 at its head office.

Morrisons said there had been no redundancy programme in the past year and the job reduction was the result of not replacing those who had chosen to leave.

The chain was bought by the US private equity investor Clayton Dubilier & Rice (CD&R) in October 2021, in a deal that marked a move away from the ethos of Sir Ken Morrison, who built the company up from his father’s market stall in Bradford.

Morrisons’ net debt obligations were £3.2bn before the CD&R takeover. The parent company – a legacy of the takeover called Market Topco – reported that net debts at the end of 2023 increased to £8.6bn. Borrowing was up last year after the acquisition of McColl’s convenience store chain for £201m in late 2022.

As the company’s debt pile has grown, it has also had to contend with rapidly changing conditions. Interest rates have soared since the takeover, while shoppers have been more cautious about spending during the cost of living crisis.