Morrison today said it is to invest £1bn in cutting prices over the next three years in order to compete with the likes of Aldi and Lidl, as the supermarket posted full-year losses on £176m.
The supermarket's results for the year to February come in stark comparison to Morrisons' profit of £879m the previous year, and it warned that profits in the coming year would be under £375m.
The £1bn investment will primarily be put into permanently lowering Morrisons' prices, having fewer impactful promotions, making its own brand more competitive, and introducing a loyalty programme.
Chief executive Dalton Philips told the BBC that the company's restructure "isn't about being a discounter, it's about offering really great value".
Philips added: "The fact is there are new entrants into the market, they're called the discounters. Customers do shop in them and we're going to recognise that.
"We have identified over a billion pounds that we can take out of our business now and that billion pounds is going to be invested back into our proposition to get those lower prices for our customers."
In January, the supermarket's online food operations director George Dymond put in a request to leave the company just weeks after he joined.
Phil Dorrell, director of Retail Remedy, said: "Is there anything left to lose? Morrisons is now emitting serious warning signs and this is the position it has been in for over a year.
"What's going wrong? Morrisons has an estate that lacks any format excitement, uninspired marketing, sharp competitors in Aldi and Lidl, and, to top it all off, zero sense of direction. It feels as dated as it does rudderless.
"It's playing catch-up in all areas of its business, from online to convenience.
"Dalton Philips is an experienced retailer, but has failed to deliver a clear and robust strategy. The truth is that the main portfolio has simply not moved on in the four years he has been there.
"In the meantime, Aldi, Lidl and Waitrose are gorging themselves on his market share. Morrisons has even lost ground to the discounters on fresh foods.
"The Deepdale M-discount trial is interesting and brave, but looks ill-executed and will simply not appeal in some markets. It does, however, show what brave thinking can do and should be applauded."
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