Morrisons has responded to a poor set of annual results with ambitious plans to reduce prices across its estate.

The multiple announced a £176m pre-tax loss for the year ending 2 February, with turnover down by 2% to £17.7bn. Like-for-like sales excluding fuel and VAT fell by 2.8%.

Chairman Sir Ian Gibson admitted it had been a disappointing year, but was upbeat about the future following a year of “significant strategic progress”.

The group will invest £1bn over the next three years into cutting prices in its supermarkets, online offer, and convenience store estate. It will also exit non-core activities, such as Kiddicare and Fresh Direct.

“Together with the strategic value of our vertically integrated supply chain, these measures will provide a firm foundation from which to provide outstanding value to our customers,” said chief executive Dalton Phillips.

“I’m confident that Morrisons will emerge from this period of necessary change as a more focused, more distinctive value leader and well positioned to compete sustainably in the new grocery landscape.”

Over the course of last year 6,500 own brand products were launched and the number of M Local convenience stores surpassed 100.

Morrisons anticipates underlying profits of £325m - £375m in 2014/15.