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Morrisons investigates online options

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Supermarket chain Morrisons today said it was “investigating” the possibilities for online shopping, disappointing those who had expected a firm announcement on the subject to come today.

Announcing its results for the first half of the year, to August 1 2010, the retailer said an assessment of an internet grocery service was underway.

It said: “The board also recognises that certain aspects of the grocery market where Morrisons does not currently operate afford attractive opportunities for future growth, and these are under review. In the first half of 2011 we will begin a trial of a new convenience format and we are currently investigating the opportunities for Morrisons in the internet grocery channel.

“Morrisons’ past success has been built on being different, in the offer we bring to customers, and this will continue in any new areas for business development.”

The announcement fell short of expectations raised earlier in the week that the first details of an online service would be unveiled in today’s results.

Morrisons results showed a total turnover of £8.1bn in the 26 weeks, up by 9.1% compared to the previous year. Like-for-like store sales rose by 0.9%, while new stores took total sales growth to 5.8%.

Pre-tax profits, however, were down at £412m compared to £449m at the same time last year. However, said the company, an exceptional pensions credit of £91m and £3m profits from property disposals had raised profits last year.

Our view: It’s not so surprising that Morrisons is not rushing into online sales. It seems very unlikely that its investigations will find that internet retailing is not for them – already all its major competitors are seeing fast growth in this sales channel. But getting it right is the part that takes time and rush to set up could create potential problems if systems are not right or thought through.

After all, at this point the supermarket has no chance of gaining as an early mover so its best bet is to benefit by looking and learning from others’ mistakes as the final entrant to the market.

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