If the other big supermarkets are the
squeezed middle, Morrisons is being steamrollered flat. The departure of its
chief executive was grimly inevitable.With
the most dated stores and weakest business strategy of the old guard grocers,
Morrisons has haemorrhaged both sales and share to the brash young discounters
who took its cheap prices USP, improved it, and then unceremoniously yanked the
rug from underneath it.Despite a big
improvement on a disastrous Q3, Morrisons’s like-for-like sales continued to
plummet over Christmas.
The biggest surprise in these grim
results is the decision to close just 10 stores. The brand’s property portfolio
is one of few ‘get out of jail’ cards – and it is busy playing it by unloading
up to £500million of property assets this year.Other
props for the stumbling business are few and far between. It has finally
completed a million internet orders, but Morrisons is so late to the online
party that its rivals have already polished off the cheese course, leaving it
hovering awkwardly by the door. Trumpeting its on-time delivery stats is a
distraction in a business which has to be first and foremost about volume.Falling sales is not the biggest issue, rather
the problem is that its sales are falling much faster than those of
Sainsbury’s and even Tesco. Dalton Philips will be relieved not to face another
bruising AGM; last time he was heckled by his own chairman.
Despite its multiple problems, Morrisons
remains a solid business – or at least it would be if it could get its offer
right. It just needs some real muscle to convince people it is attractive
again. The marketing over the last few years has been dire, and has done
nothing to change its tired public image. The brand needs to be much
bolder if it is to recapture the distinctive market niche that it created
and then lost.”
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