Morrisons sales drop: there's work to be done

Like-for-like sales shrink by 1.8 per cent.

In the 13 weeks to 5 May 2013, Morrisons saw total sales rise by 0.6 per cent but like-for-like sales shrink by 1.8 per cent. While Morrisons has experienced an easing in LFL declines during Q1, the grocer’s performance serves to highlight that it has continued to underperform in a highly competitive market. Moreover, while its current strategic focuses are sensible, and have the potential to get Morrisons back on track in the medium-long term, they will inevitably take time to bear fruit.

With the UK food & grocery market increasingly being characterised by falling customer loyalty and low volume growth, which is in turn being met with heavy promotional activity among the main players, Morrisons has been forced to react. To this end, there has been a noticeable sharpening of promotional activity with the grocer building upon investment into innovative campaigns such as Payday Bonus, with the launch of its new Our Pick of the Street campaign – which focuses in particular on fresh products.

Elsewhere, it has been much keener in seeking to communicate its key differentiators. This period saw a greater focus on marketing extolling the virtues of Morrisons’ virtual integration strategy, via the medium of a high profile television campaign featuring family favourites Ant and Dec, complemented by full-page spots in newspapers. The benefits of its sourcing and distribution strategy will have resonated well with consumers amid the horsemeat scandal which has understanding eroded trust in grocery retailers. Indeed, Morrisons was one of the few grocers unaffected by the furore.

This period saw Morrisons make further progress across a number of areas which are key to its long term health. It remains on track to operating 100 M Local by year end having acquired a tranche of outlets from failed retailers such as Blockbuster and Jessops. Morrisons also plans to have implemented its new Fresh food concept across 40 per cent of its portfolio by the end of its financial year; further strengthening its credentials for quality and freshness. However, while it plans to have a full online food & grocery offer for 2014, the specifics remain unclear. Moreover, its high profile discussions with Ocado – which are likely to lead to Ocado providing technological expertise, as well possible use of one of its distribution centres – have yet to yield any results. 

Morrisons continues to be a soundly run retailer and many of its current investments – particularly in relation to online and convenience – are set to leave it significantly better positioned in the medium-to-long term. However, it will continue to face short term challenges as it plays catch up with rivals.  Moreover, while the grocer is displaying greater adeptness in communicating its key points of differentiation, there is still much work to be done around strengthening price perceptions.

Morrisons. Photograph: Getty Images

 Managing Director of Conlumino

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Northern Ireland election results: a shift beneath the status quo

The power of the largest parties has been maintained, while newer parties running on nicher subjects with no connection to Northern Ireland’s traditional religious divide are rapidly rising.

After a long day of counting and tinkering with the region’s complex PR vote transfer sytem, Northern Irish election results are slowly starting to trickle in. Overall, the status quo of the largest parties has been maintained with Sinn Fein and the Democratic Unionist Party returning as the largest nationalist and unionist party respectively. However, beyond the immediate scope of the biggest parties, interesting changes are taking place. The two smaller nationalist and unionist parties appear to be losing support, while newer parties running on nicher subjects with no connection to Northern Ireland’s traditional religious divide are rapidly rising.

The most significant win of the night so far has been Gerry Carroll from People Before Profit who topped polls in the Republican heartland of West Belfast. Traditionally a Sinn Fein safe constituency and a former seat of party leader Gerry Adams, Carroll has won hearts at a local level after years of community work and anti-austerity activism. A second People Before Profit candidate Eamon McCann also holds a strong chance of winning a seat in Foyle. The hard-left party’s passionate defence of public services and anti-austerity politics have held sway with working class families in the Republican constituencies which both feature high unemployment levels and which are increasingly finding Republicanism’s focus on the constitutional question limiting in strained economic times.

The Green party is another smaller party which is slowly edging further into the mainstream. As one of the only pro-choice parties at Stormont which advocates for abortion to be legalised on a level with Great Britain’s 1967 Abortion Act, the party has found itself thrust into the spotlight in recent months following the prosecution of a number of women on abortion related offences.

The mixed-religion, cross-community Alliance party has experienced mixed results. Although it looks set to increase its result overall, one of the best known faces of the party, party leader David Ford, faces the real possibility of losing his seat in South Antrim following a poor performance as Justice Minister. Naomi Long, who sensationally beat First Minister Peter Robinson to take his East Belfast seat at the 2011 Westminster election before losing it again to a pan-unionist candidate, has been elected as Stormont MLA for the same constituency. Following her competent performance as MP and efforts to reach out to both Protestant and Catholic voters, she has been seen by many as a rising star in the party and could now represent a more appealing leader to Ford.

As these smaller parties slowly gain a foothold in Northern Ireland’s long-established and stagnant political landscape, it appears to be the smaller two nationalist and unionist parties which are losing out to them. The moderate nationalist party the SDLP risks losing previously safe seats such as well-known former minister Alex Attwood’s West Belfast seat. The party’s traditional, conservative values such as upholding the abortion ban and failing to embrace the campaign for same-sex marriage has alienated younger voters who instead may be drawn to Alliance, the Greens or People Before Profit. Local commentators have speculate that the party may fail to get enough support to qualify for a minister at the executive table.

The UUP are in a similar position on the unionist side of the spectrum. While popular with older voters, they lack the charismatic force of the DUP and progressive policies of the newer parties. Over the course of the last parliament, the party has aired the possibility of forming an official opposition rather than propping up the mandatory power-sharing coalition set out by the peace process. A few months ago, legislation will finally past to allow such an opposition to form. The UUP would not commit to saying whether they are planning on being the first party to take up that position. However, lacklustre election results may increase the appeal. As the SDLP suffers similar circumstances, they might well also see themselves attracted to the role and form a Stormont’s first official opposition together as a way of regaining relevance and esteem in a system where smaller parties are increasingly jostling for space.