More reasons to go online for supermarket Morrisons

The head of Morrisons unveiled plans to drag the struggling supermarket into the 21st century as he admitted it was losing £500m a year in sales to online rivals and still using pen-and-paper methods to check stock

Morrisons, Britain's fourth biggest grocer is poised to launch on the web later this year and is under pressure to catch up with the likes of Sainsbury's and Tesco which began trading over the internet in the 1990s and are now seeing double-digit online growth.

Chief executive Dalton Philips admitted that it had been years behind its rivals but insisted the business was now "fit for the future" after a �300m infrastructure revamp and plans for the launch of its online operations following a deal to share technology with web retailer Ocado.

The Bradford-based retailer is also pushing ahead with expansion plans which include a greater presence in London where it currently has only a 6.5% market share.

Its new M Local convenience stores are set to number 100 by the end of the year, rising to a possible 300 in three years time, many of them opening in sites previously occupied by failed high street names such as HMV, Jessops and Blockbuster.

The expansion will see the first Morrisons store in London's West End as well as locations including Kensington, Westminster and Windsor far removed from its northern heartlands.

Mr Philips said: "By 2015, when all the work now under way is finished, we will be a true national, multi-channel and multi-format retailer.

"It means we can compete on a level playing field for the first time and succeed by building on the enormous strengths of our business."

He said the partnership with Ocado would give the supermarket immediate access to online technology and deliver profits in four years - an outcome which rivals had taken a decade to achieve when developing their own technology.

Mr Philips admitted parts of the business had been two decades behind rivals when he took over three years ago, with cash still being counted manually in stores at the end of each working day.

It was a 21st century business run on "infrastructure firmly stuck in the 20th century" with the antiquated systems making it difficult to plan promotions such as multi-buy offers.

Mr Philips said Morrisons was the only retailer of its size in the world still using pen and paper for stock checking, which will not be completely phased out until January next year.

"It is the most advanced rebuilding of retail systems anywhere in the world - from having the worst systems to the best, leapfrogging a generation," he said.

Mr Philips said Morrisons had also been losing out as otherwise loyal customers.

"We are a value retailer without a dotcom offering," he said. "So many people can't afford to take the bus down to a store and take the taxi home."

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer