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Morrisons makes supply and delivery changes to cope with rising costs

Morrisons is to make changes to its supply and delivery to better serve its ecommerce shoppers and cope with additional supply chain costs. The changes include ceasing home delivery operations in around 50 stores from October.

The retailer, which reported its interim results for the half-year to 1 August this week, said that it was facing sustained supply chain cost increases and was working hard to combat them.

Morrisons said that it expects sustained recent commodity price increases, freight inflation and the current shortage of HGV drives will all be factors in driving industry-wide retail price inflation in the second half.

The company has increased its online range and says it is working to improve the efficiency of its store-based Morrisons.com service for customers. It is consolidating store-pick stores by ceasing home delivery operations in around 50 stores next month which it says will help to optimise volume throughput. It says that it will continue to maintain the same Morrisons.com service levels, including the number of customers and postcodes it delivers to through a network of 150 stores and its fulfilment centres.

Morrisons is also investing in picking capacity and dedicated delivery vans. The retailer’s operations for Morrisons.com were temporarily disrupted by Ocado’s Erith customer fulfilment centre after its recent fire but Morrisons said things are now back to normal.

Morrisons also reported on its Morrisons on Amazon home delivery channel, now offering its same day delivery service to more than 60 towns and cities in the UK covering 60% of the British population. In those stores, it said that the Amazon offer accounted for more than 10% of sales and as such the pair are to open further Morrisons on Amazon locations this year. Morrisons is also supplying Amazon Fresh UK stores.

It has also increased the number of Morrisons stores offering grocery home delivery through Deliveroo, with 328 stores now offering the service, up from 183 at the 2020/21 year-end. The average basket total is running at nearly 12 items, the retailer reported.

Morrisons said its recently launched HGV driver recruitment programme for colleagues and their family and friends had identified ‘hundreds’ of potential drivers who Morrisons and its logistics partners will now fast-track through Morrisons-funded training.

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