Morrisons’ £95 million south west regional distribution centre is expected to become fully operational early in 2012 – a few months later than originally planned.
In its half year results, the retailer said development of the site at Bridgwater in Somerset was now underway, but had been affected by “delays experienced by the site developer in achieving a viable total scheme for the site, which depends also on residential development that has proved challenging given the state of the housing market”.
The 800,000 sq ft facility will be freehold, and will serve 63 stores and provide further capacity to support Morrisons’ “National to Nationwide” expansion.
The group also outlined further developments to its supply chain including acquisitions of a stir fry and prepared vegetable business and a cooked meat production plant.
It is also evaluating a number of other areas of production which would fit well into the Morrisons model. In addition, it intends to develop a new produce pack house facility alongside the Bridgwater RDC in 2012.
During the first half, Morrisons began deployment of new IT systems across all areas of the business. The six year, £310m programme of investment, will result in the replacement of all the group’s core systems and technology infrastructure.
So far, voice-picking technology implemented at grocery and frozen distribution centres, the bulk of the group’s payroll, HR and financial systems have been replaced, a new wide-area network installed, the majority of store hardware renewed.
The software required to run the distribution centres and food production facilities is undergoing pilot running in one depot and one produce plant, and has been successful.
Roll out to other depots and plants will take place through 2011 and 2012. “The success of these activities, and our proven ability to implement changes with no impact on the business, gives us great confidence for the remainder of the programme,” the group said.
Additionally, a new store electronic point of sale system is being rolled out in a programme that will complete in 2012 and the new trading product master file is also being populated, a process that will complete in early 2011.
New chief executive Dalton Philips is leading the group into new retail areas with trials of a new convenience format and investigations into the opportunities for Morrisons in the internet grocery channel.
Overall the group saw sales rise 9.1 per cent in the first half to £8.1 billion while underlying pre-tax profit was up 14 per cent to £410m.