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

Photo: Getty
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David Cameron's prisons speech could be the start of something good

If the Prime Minister puts his words into action, then this speech could mark the beginning of a big shift on prisons policy. 

David Cameron’s speech condemning prisons as violent and failing could herald a seismic change in policy. He is absolutely right to point to the waste of money, effort and lives that characterises today’s prison system. He is also right about the direction of travel that needs to be taken and some of his ideas are at the very least worthy of discussion. The most important reform was missing, as none of his aspirations can happen unless the sheer number of men, women and children in prison is cut, and cut radically. Sentencing reform is the lynchpin.

The detailed proposals will be scrutinised as they are rolled out over the coming months, but the urgent over-riding challenge is to cut the prison population. Last week the number of men in prison increased by 185, and in the last four weeks the prison population has gone up by 684 men and women. Prison overcrowding is not standing still, it is rapidly deteriorating.

Chris Grayling closed 18 prisons and wings, reallocating the population into the shrunk estate. He cut prison staff by more than a third in each prison. The result was overcrowded, understaffed, violent prisons full of drugs and very disaffected staff trying to control frustrated prisoners on restricted regimes.

I was expecting some thinking on who we send to prison and what we do with them when they are incarcerated to create the conditions for radical reform. I was disappointed as the proposals were oddly reminiscent of things that Labour tried and contributed to this mess in the first place.

Labour was very proud of building lots of new prisons, hoping that they would build their way out of an overcrowding crisis. What happened of course was that new prisons were filled even before they were completed so the old prisons couldn’t be closed. Today we hear that £1.3 billion will be spent on building ‘reform prisons’ that will pilot new ways of working. My worry is that they will become warehouses unless the sheer number of prisons is restricted and resources are allocated to allow for just the sort of flexibility being proposed.

Giving governors more autonomy sounds good, and I support it in principle, but they always used to have their own budgets with discretion to choose how to spend it, including commissioning education and other services. It is no good having increased autonomy if they are constantly firefighting an overcrowding crisis and not given the resources, including well trained prison staff, to implement new ideas.

We already have league tables for prisons. Every few months assessments of how prisons are performing are published, along with regular inspections and independent boards monitor conditions. Reoffending rates are published but this information is less robust as prisoners tend to move round the system so how can one establishment be accountable.

I was pleased to hear that work inside prisons is going to be a key reform. But, the Prime Minister referred to a small project in one prison. Projects with desultory training in the few hours that men get to spend out of their cells will not instil a work ethic or achieve work readiness. Prisoners get a pack of cereals and a teabag at night so they don’t have breakfast, are not showered or clean, are wearing sweaty and shabby clothes.

Every day men and women are released from prison to go to work in the community as part of their programme of reintegration. This is extremely successful with incredibly few failures. So what is the point of adding extra expense to the public by tagging these people, unless the purpose is just to feed the coffers of the private security companies.

There are imaginative ways of using technology but what was being suggested today looks as though it is just adding restrictions by tracking people. That would be neither creative nor effective.

David Cameron is looking to his legacy. I fear that I could be listening to a Prime Minister in five or ten years bewailing the dreadful prison conditions in institutions that are no different to today’s overcrowded dirty prisons, except that they were built more recently. He will have achieved a massive investment of capital into expanding the penal estate but, whilst there will be more prisons, even the new jails could be overcrowded, stinking and places of inactivity and violence.

I want the Prime Minister to look back on today’s speech with pride because it achieved humanity in a system that is currently failing. I would like to see a prison system in decades to come that is purposeful, with men and women busy all day, getting exercise for the mind, body and soul. I would like to see prisons that only hold people who really need to be there because they have committed serious and violent crimes but whose lives will be turned around, who achieve redemption in their own eyes and that of victims and the public.

My job is to hold him to account for this vision. If what he announced today achieves radical reform and changes lives for the better, I will cheer. I will be watching.

Frances Crook is the Chief Executive of the Howard League for Penal Reform.