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

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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