Morrisons joins cull of final-salary pensions

The Bradford-based grocer Morrisons has become the latest company to axe its final-salary pension scheme for existing members.

The ditching of the scheme came as Morrisons posted better-than-expected underlying sales, up by 7.3 per cent, excluding fuel, for the 13 weeks to 3 May, driven by storming sales in the South, London and Scotland.

From July, Morrisons will move its final-salary pension scheme's 4,500 existing members – who still work at the grocer – into one based on the average they earn over their career. Morrisons shut its final-salary scheme to new members in 2003. The change will result in a credit of about £70m on its income statement at the interim stage.

The move by Morrisons came a day after the bank Barclays said it was ditching its final-salary pension scheme for 18,000 of its staff. On Monday, the oil giant BP revealed it was closing the door on its scheme to new members. The UK's fourth-biggest grocer has previously injected £200m into its final-salary schemes and reduced the funds' exposure to equity investments. "The final step was to move all future benefit accrual on to a career average basis, such that it will grow in line with inflation rather than being linked to final salary," Morrisons said.

Over its first-quarter, Morrisons posted total sales, excluding fuel, up by 8.2 per cent, as 1 million customers visited its stores each week. Marc Bolland, the chief executive of Morrisons, said: "We continue to do particularly well in the non-traditional Morrisons areas, such as London, the South and Scotland." More specifically, he said that some of its smaller stores in southern England had delivered sales up by 13 per cent over the past year, bringing their sales growth over the past two years to 25 per cent, as they attract and keep new customers.

Mr Bolland also said Morrisons was grabbing sales from its supermarket rivals and from the so-called "premium" grocers, Waitrose and Marks & Spencer. For the 12 weeks to 17 May, Morrisons' sales grew by 7.9 per cent – ahead of Sainsbury's 7.8 per cent, Asda's 7.2 per cent and Tesco's 4.7 per cent, according to TNS Worldpanel.

Mr Bolland said Morrisons had delivered strong sales across its product offer, citing buoyant sales of premium ranges and fresh foods, to which it added more than 500 new products.

Darren Shirley, an analyst at Shore Capital, said given that Morrisons said that food inflation had eased in the first quarter, after peaking in the fourth quarter, it must have delivered "a compensatory uplift in volumes".

Morrisons was also boosted by Moody's, the ratings agency, upgrading its credit rating for the second successive year to triple-A, the top corporate rating for creditworthiness. Richard Pennycook, the finance director of Morrisons, said the grocer was one of only three retailers globally with an A3 rating, alongside the world's biggest retailer, Wal-Mart, and the French giant Carrefour. Last week, Moody's changed the outlook on Tesco's A3 rating to negative from stable, citing concerns over its high level of leverage.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
News
Details of the self-cleaning coating were published last night in the journal Science
science
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
News
i100
Arts and Entertainment
The beat is on: Alfred Doda, Gjevat Kelmendi and Orli Shuka in ‘Hyena’
filmReview: Hyena takes corruption and sleaziness to a truly epic level
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable