Supermarket group Morrison’s has launched a major restructure following the news that it made a loss of £176 million in 2013 compared to a £879 million.

The group has lagged behind its competitors in the ‘big four’ being late to the online and convenience markets. However, the group said that the website was performing ahead of plan and it now had over 100 M local convenience stores now trading.

Dalton Philips, chief executive, said: "The strategy we are announcing today is a bold and comprehensive response to the fundamental structural changes that are taking place in grocery retail.   

“We are significantly reducing our cost base and will invest £1bn into our proposition over the next three years, to improve our value even further and to defend and strengthen our competitive position. Customers will see this in our stores as well as in our fast growing online and convenience offers. At the same time we will exit non-core activities, significantly reduce our capital expenditure and deliver improved operating cashflow and return on capital employed.  
“Together with the strategic value of our vertically integrated supply chain, these measures will provide a firm foundation from which to provide outstanding value to our customers and to generate meaningful shareholder returns over the medium term.

“I'm confident that Morrisons will emerge from this period of necessary change as a more focused, more distinctive value leader and well positioned to compete sustainably in the new grocery landscape."

Commenting on the results, Sir Ian Gibson, chairman, said: "In trading terms this has been a disappointing year for Morrisons, with consumer confidence and market conditions continuing to be challenging. It has however been a period of significant strategic progress as we lay the foundations for a stronger future. Our financial position remains strong.

“The review of our business undertaken by the board, underpins our confidence in Morrisons strategic direction and the long-term prospects of the business.

“In respect of the year ending 1st February 2015 the Board anticipates that the total annual dividend will be not less than 13.65p. Thereafter we expect dividends to grow more slowly than earnings, as dividend cover rebuilds towards our target level of around two times."