Morrisons has claimed that its suppliers have nothing to worry about - despite revealing that the terms it receives will play a key role in its long-awaited optimisation plan.
The retailer this week announced a record loss of £312.9m for the 12 months to January 29, which it blamed on the cost of integrating Safeway and converting stores. Pre-tax profit before exceptionals fell from £332.2m to £61.5m.
In its optimisation plan, Morrisons says it will focus on squeezing greater efficiencies out of stores, staff and distribution. It aims to create a £90m improvement in its margins over the next three years. Outgoing chief executive Bob Stott indicated that some of this would come from suppliers.
He said: "We can achieve this through greater efficiencies in our supply chain but it will also mean getting the terms that we deserve. Some of this will be passed on to the customer but some will also go to making the business more profitable."
Stott said the terms would reflect the greater volume of the combined businesses and the greater efficiency of a single operating system.
Chairman Sir Ken Morrison admitted some lorries were doing too many miles to supply its stores in the south following the closure of its distribution centres in Bristol and Aylesford in Kent. He said the retailer would eventually develop a purpose-built distribution centre for the south.
Morrisons refused to shed any light on its search for a new chief executive. Sir Ken said that it had made good progress and that there were some talented people in the frame.