Morrisons is exploring supply agreements that could put its food products on shelves at rival supermarket chains, as the company tries to make better use of spare factory capacity and widen the reach of its manufacturing arm, Myton.
The supermarket has invited representatives from major retailers to visit its factories as it seeks new deals for products including pies, meat and eggs, and it is also looking to win business from hospitality firms. Myton is believed to be one of the stronger-performing parts of the business, giving Morrisons a route to grow outside its own stores while its wider finances remain under pressure.
The move comes after Morrisons reported losses of £381m for the year to Oct. 26, a result dragged down by a £281m debt interest bill. Net debt stood at £3.1bn at the end of the financial year, an overhang from the chain’s £10bn takeover by private equity firm Clayton, Dubilier & Rice in 2021.
That debt load has forced the supermarket into a period of retrenchment. It recently announced it was closing 100 convenience stores, and it has also shuttered a number of cafés and counters as it looks to trim costs and arrest years of losses. The new manufacturing push suggests the company is trying to turn one of its few stronger assets into a broader source of revenue.
Morrisons has said before that manufacturing remains central to its identity. Rami Baitiéh said in January that manufacturing was part of the “DNA of Morrisons – it’s going to stay”, underscoring that the business sees Myton as more than a side line. The company also said in a statement that Myton is a high-quality food manufacturing business and has always served other customers as well as Morrisons.
A spokesman added that Morrisons has been building this part of the business over recent years by attracting new customers in retail, food service and food manufacturing, with the aim of creating a broader base in the UK and internationally. He said Myton does not comment on the detail of its customer relationships.
The tension for Morrisons is straightforward. The company is still carrying the weight of a debt-fuelled takeover, but it owns manufacturing capacity that many rivals do not. If it can fill those factories with outside orders, Myton could help soften the impact of weak profits at the supermarket chain itself. If it cannot, the pressure on a business already cutting stores, cafés and counters will only deepen.
