Strong like for like sales in the first quarter keep the Morrisons ‘Optimisation Plan’ to restructure the business on target. Announcing its interim management statement today, Morrisons said it was a good start to the new financial year.
A seven per cent like for like sales increase for the period ending February 3, 2008 compared well to a 4.6 per cent increase for the same period in 2007. The supermarket chain, which acquired rival Safeways in March 2004, said the improvement was due to improving customer numbers, but noted that price inflation is set to become a major factor for the retail industry.
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Earlier this year Morrisons announced a five-year transformation plan dubbed the ‘Optimisation Plan’ which includes a complete revision of the IT infrastructure within the company. First off are its human resources and payroll systems, which will be completed by the end of this year.
Throughout 2009 and 2010 major IT refreshes will come on-stream as Morrisons becomes an Oracle shop with Oracle software on HP hardware through out. IT has a budget of £110m from the ‘Optimisation Plan’ and is investing in the Oracle retail range of systems for merchandising and planning, as well as the Oracle E-Business Suite; Oracle Siebel CRM platform, Oracle Identity Management and the Fusion and SOA middleware applications. An Oracle database will underpin the entire new infrastructure.
The ‘Optimisation Plan’ has a budget of £450 million and touches every aspect of the business from in-store presentation to the branding on its fleet of trucks. The Plan will increase margins for the supermarket chain through improved distribution and manufacturing.