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

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Tony Blair won't endorse the Labour leader - Jeremy Corbyn's fans are celebrating

The thrice-elected Prime Minister is no fan of the new Labour leader. 

Labour heavyweights usually support each other - at least in public. But the former Prime Minister Tony Blair couldn't bring himself to do so when asked on Sky News.

He dodged the question of whether the current Labour leader was the best person to lead the country, instead urging voters not to give Theresa May a "blank cheque". 

If this seems shocking, it's worth remembering that Corbyn refused to say whether he would pick "Trotskyism or Blairism" during the Labour leadership campaign. Corbyn was after all behind the Stop the War Coalition, which opposed Blair's decision to join the invasion of Iraq. 

For some Corbyn supporters, it seems that there couldn't be a greater boon than the thrice-elected PM witholding his endorsement in a critical general election. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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