Seven institutional investors representing $1.1tn have written to Morrisons Chairman Andrew Higginson ahead of the supermarket’s AGM today, calling on the company to boost sales of healthier food and drink products.
The investors, which include NEST, Guy’s & St Thomas’ Foundation and JO Hambro Capital Management, note that Morrisons already has a target to increase the number of healthier own-brand products (to 65% of all own-brand products by 2025). But Ignacio Vazquez, Senior Manager at ShareAction, which co-ordinated the letter, said:
“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.”
As shareholders are not able to ask questions directly at Morrisons’ AGM this year, the investors have written to the supermarket instead, calling on the company 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;
- include a description of progress on delivering towards such targets and strategic commitments in its annual reports from 2022 onwards.
Representing ten percent of the British grocery market, Morrisons is one of the largest supermarket companies publicly listed on the London Stock Exchange, along with Tesco and Sainsbury’s. Morrisons is the only one of the three yet to set sales-based health targets as requested by the investor letter. Most recently, Tesco set similar targets when an investor coalition co-ordinated by ShareAction filed the UK’s first ever shareholder resolution on health issues at a supermarket.
Morrisons scored just 20% for its performance on health issues in a recent report by the Access to Nutrition Initiative, lagging behind rivals Sainsbury’s (35%), Marks & Spencer (33%), Co-op (30%), Tesco (30%) and Lidl (25%). The report assessed supermarkets’ public commitments and actions on issues such as nutrient profiling, product formulation, responsible marketing and labelling. A separate report from the Food Foundation found that ‘encouraging healthy diets’ is Morrisons’ weakest area of performance out of 10 key ESG topics for the supermarket sector.
Ignacio Vazquez continued: “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.
For this reason, we are pleased to be joined by investors today in calling on the company to follow other major listed UK supermarkets in disclosing and committing to grow the proportion of its sales made of healthier food and drink products. We hope that Morrison’s Board will grasp this opportunity to build on its social responsibility credentials while also demonstrating to its shareholders that it is appropriately managing the rising financial risks and opportunities in this area.”
Notes to editors
You can read the investor letter here. It was signed by seven institutional investors including:
- Castlefield Investment Partners
- Guy’s & St Thomas’ Foundation
- JO Hambro Capital Management: UK Dynamic, UK Equity Income and UK Opportunities Funds
- Local Authority Pension Fund Forum
- Northern Local Government Pension Scheme