MORRISONS SUPER MARKET

Financial Statement Analysis of Morrisons Supermarket

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Financial Statement Analysis of Morrisons Supermarket

Background on company and industry

Morrisons PLC. is the fourth largest retail superstore in UK dealing in food items. Morrison consists of 475 stores across UK with individual covered area of 3000-40000 square meters. Morrison has a customer footfall of 11 million customers each week. 131000 employees are serving the customers across 75 stores of Morrison (Annual Report 2012).

Morrisons prime focus is on providing fresh food to the customers. The store also provides wide arrays of self made brands in food category. Morrisons also has a segment by the name of “Market Street' this segment deals with customer preferences. Highly trained Bakers, Butchers and fishmongers in this segment cater the custom needs of the customers. They prepare the food according to the requirements of the customers. The companies supply chain method helps in reducing the intermediary costs by purchasing the food supplies directly from the farmers. The company has diversified operations. It also operated fuel stations, laundry service and provides photo processing services at the stores. Morrison has a mix of subsidiaries.

UK Retail industry

In August 2012 the retail sales have been increased by 2.7% as compared to previous years. The non-food sector improved by 2.2 percentage points and the food sector improved by 0.4 percentage points (ONS, 2012). I 2011 there were 284499 retail outlets in UK and it consumes 1/3 of the consumer spending (BRC, 2012).

The Statistics have shown that online average weekly retail sales in UK were 310.9m in 2007, and in 2010 it showed a 100% growth rate by increasing to 652m. In 2011 the weekly retail sales amounted to £440- £530m (MarketLine, 2012).

Non-financial information

Non financial information is necessary for in investor apart from financial facts because it helps in undermining the factors other that financial performance. Those factors if not complied or followed properly might lead to disastrous results including litigation.

The operations of Morrison are vertically integrated which means which allows Morrisons to purchase, manufacture, distribute and sell those product through its retail chain stores. The company owns 12 manufacturing units and 13 distribution centres across UK. Through multiple integrations and acquisitions Morison is able to strengthen is supply chain. With these multiple acquisitions Morison is able to eliminate the intermediary product and created a value chain for it customers and itself. This also improves the profit margin for the company as well helps in providing lower cost value products to the customers of Morrison (MarketLine, 2012).

Differentiated Business Model

Morrisons super markets across UK also have a sore by the name of Market Street. Market Street consists of highly trained butcher, fishmongers and bakers. They provide the food according to the demands of the consumers. They also provide them valuable knowledge to the customer, regarding the preparation of food as well as attracting them to shop more often in future. This is leading to increased customer loyalty at Morrisons Store. Staff of Market Street is ...