Morrisons keeps supply chain costs down

11 January 2011
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11 January 2011 | Lindsay Clark

Morrisons is able to improve supply chain efficiency because it makes more of its products than other UK supermarkets, according to the firm’s chief executive.

Dalton Philips said the retailer was trying to keep prices down in the face of rising costs of key ingredients.

“There is a lot of pressure on commodity prices – wheat, cocoa, sugar – so the focus for us has to be on keeping prices down,” he told BBC Radio 4's Today programme.

“Because we manufacture so much of our product ourselves we have an ability to take costs out of the supply chain and pass them on to customers quickly,” Philips said.

Morrisons was announcing like-for-like sales growth of 1 per cent in the six weeks to 2 January.

In 2007 the supermarket chain announced a three-year £450 million investment plan, which aimed, in part, to improve its distribution and supply chain.

Marc Bolland, the chief executive at the time, said the six-month strategic review would bring in more "shelf-ready" products.

A spokesman told SM that such products include bread and fresh produce, which are delivered from the store's own suppliers. They come in crates that are ready for store display and can be returned, reducing packaging.

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