UK grocer Morrisons under fire over healthy food strategy
Join Our Newsletter - Get important industry news and analysis sent to your inbox – sign up to our e-Newsletter here

UK grocer Morrisons under fire over healthy food strategy

By Andy Coyne 10 Jun 2021 (Last Updated June 10th, 2021 10:08)

Morrisons becomes the latest UK supermarket to come under pressure over its healthy foods approach.

UK grocer Morrisons under fire over healthy food strategy

Morrisons, one of the UK’s ‘big four’ supermarket chains, has come under fire from investors who argue it is lagging behind rivals when it comes to the sale of healthy food and drink products.

A group of investors managing more than US$1trn between them have voiced concerns in a letter to Morrisons before its AGM today (10 June). They include NEST (the UK’s largest workplace pension scheme), Guy’s & St Thomas’ Foundation and Jo Hambro Capital Management.

They suggest Morrisons is now the only publicly-listed UK supermarket that has not committed to shifting its sales toward healthier products, posing a risk to the business amid regulatory and consumer trends in healthier diets.

Recently, the UK’s largest supermarket group, Tesco, set sales-based healthy food and drink targets after an investor coalition filed a shareholder resolution urging it to do so.

Now, seven institutional investors, coordinated by the pressure group ShareAction, are calling on Morrisons – based in West Yorkshire in northern England – to set similar targets to increase sales of healthy products.

The letter, sent by ShareAction chief executive Catherine Howarth to Morrisons chairman Andrew Higginson, urges the grocer to disclose the share of total food and non-alcoholic drink annual sales by volume made up of healthier products and to publish a long-term target and a strategy to significantly increase that share and include a description of progress on delivering towards such targets and strategic commitments in its annual reports from 2022 onwards.

The letter read: “We are sending this letter today calling on Morrisons to strengthen its ambition in the area of health and nutrition and to increase transparency on this topic. Other major listed supermarkets are currently demonstrating greater leadership in this area.

“We appreciate that Morrisons continues to deliver annual reductions in the calorie, salt and sugar content of its products through reformulation and also that you expect 65% of own-brand products to be healthier by 2025. We also recognise that the company is focused on making food affordable for all its customers.”

It continued: “While acknowledging Morrisons’ efforts, the company’s disclosure does not yet provide investors or other stakeholders with a clear picture of its position and long-term strategy. In this context, a recent review by the Access to Nutrition Initiative of UK supermarkets’ commitments to promote better diets found that Morrisons reported information on only 20% of all possible indicators.

“Encouraging healthy diets is also Morrisons’ area of weakest performance across major environmental and social topics according to the Food Foundation.”

Ignacio Vazquez, senior manager at ShareAction, added: “Investors want to better understand how supermarkets are taking responsibility for their enormous influence on public health. This means targeting greater sales of healthier products – not just the number of products – and applying these targets to all products, not just their own-brand ranges.

“While Morrisons has made significant progress in reducing the calorie, salt and sugar content of its own-brand products, questions remain about the company’s strategy and overall exposure to growing regulatory pressure and consumer trends supporting healthier diets.”

When asked by Just Food for a response to the investors’ demands, a Morrisons spokesperson said: “We are committed to helping our customers make healthier choices and we are supportive of measuring performance and setting meaningful targets.

“We already publish the proportion of our own brand products which are classed as healthy and have a commitment to increase this.”