International Logistics at Morrison

The distribution strategy of Morrison is quite unique among the other retail players within the UK market. It is the only largest retail chain supermarket that owns and operates healthy and fresh food production and processing facilities. The organization has implemented a vertically integrated distribution operation in the food category. This vertically integrated operation has helped Morrison to produce, distribute and retail enormous bulk of its fresh and unsullied meat and dairy requirements (Doole and Lowe, 2005, p.131). Moreover, this distribution structure helps the organization to process and package the fresh vegetables and fruits effectively. The organization has expanded and strengthens its manufacturing and distribution infrastructure in the fiscal year 2006 (Ruddick, 2013, p.1). In terms of manufacturing, Morison has expanded its in-house baking effectively and capacity by acquiring Rathbone’s 80% stake. The abattoir operation of Morrison was started to expand in the year 2005 by acquiring the second facility in Scotland. The organization also has extended fruit processing and packing facility in Northamptonshire. Moreover, the organization has introduced a new warehouse in Rushden in order to package the vegetables. The organization has opened a fresh and new regional dedicated distribution centre at Kettering in the year 2005 (Furrer, 2010, p.233). It was estimated that this centre may save almost 70 nearby stores in the UK. The global recession and European financial crisis in 2008 have affected the international distribution and logistics structure of Morrison. Moreover, several unfavourable reasons have resulted in a fall in sales (Plunkett, 2009, p.49). Despite an extra trading date in the year 2011, the organization has reported a 2.5pc sales drop. It is feasible that, the organization has implemented a vertical integration strategy in their distribution channel (Mangan, Lalwani and Butcher, 2008, p.130). The major concern for Morrison is that the sales figure has declined since Christmas, whereas the other competitors, such as Sainsbury and Tesco have performed relatively well compared to Morrison. According to Philips, limited numbers of convenience stores is affecting the business performance of Morrison. The organization has only 12 convenience stores. On the other hand, the other large competitors of Morrison have a strong presence in the UK grocery retail market with numerous existing convenience stores. It is indicating that the organization has limited access to the growing division of the international grocery retail market. It is expected that, the organization may face several difficulties if they try to introduce new convenience stores in near future. According to Morrison, selling the grocery food products and vegetables through convenience store will be costly comparing to the selling food products in traditional supermarket. Therefore, it is feasible that, the limited number of convenience store is hurting the sales of the organization. On the other hand it is affecting less to the business profit margins of Morrison. Moreover, the shareholders of Morrison are backing this particular old traditional sales strategy. The declined Christmas sales figure may create huge threat for the future perspective of Morrison.The organization is still utilizing the supermarket chain model in order to sell their products. It is discussed earlier that, this strategy may maximize the business profit but cannot increase the market share.