Morrisons to launch online shopping service

Morrisons trolleys
Image caption Morrisons says consumer confidence faces challenges this year

Supermarket group Morrisons has announced plans to launch an online shopping service in the next two years.

Morrisons is the UK's fourth-largest supermarket, after Tesco, Asda and Sainsbury's, and is the only one of the four without a major online business.

The news came as it reported annual pre-tax profits of £874m, up from £858m the year before.

Morrisons also said it was set to trial new convenience stores, and announced plans for a £1bn share buy-back.

During the 12 months to the end of January, like-for-like sales, excluding fuel and VAT, rose 0.9%.

Cautious outlook

As Morrisons continues to carry out research into e-commerce, it also announced a £32m investment in US internet grocer FreshDirect, which will see it take a 10% stake in the firm.

"They are leaders in fresh food online and they do it profitably," chief executive Dalton Philips told the BBC.

This marked its second e-commerce investment in as many months, after February's acquisition of baby goods website Kiddicare for £70m.

Morrisons also said it was exploring the idea of opening convenience stores, with plans to open three trial stores this year.

In addition, the group said it would return £1bn to shareholders over two years and was committed to double-digit dividend growth over the next three years.

But it also said in a statement: "We expect the economic backdrop to remain challenging in 2011, with higher taxes, government spending cuts, inflation and rising unemployment all continuing to weigh on consumer confidence and disposable incomes."

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