Supermarket giant Morrisons has announced plans to restructure the business following a £176m loss for the year to the end of February 2014.
The retail chain saw profits before tax slump from £879m at year end in February 2013 to a loss of £176m in 2014, with turnover and like-for-like sales dropping in the face of fierce competition from discount supermarkets.
Morrisons chairman Sir Ian Gibson 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.”
The supermarket launched an online delivery service through Ocado in January this year in an attempt to catch up to the service offered by competitors, which is “performing ahead of plan”.
Dalton Philips, chief executive of Morrisons, 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.”
Morrisons plans to sell baby products business Kiddicare and its stake in New York based food retailer, Fresh Direct.