Blog: Heat rises at Morrisons
Katy Askew | 28 April 2014
Morrisons management may be feeling the heat today (28 April) after a scathing attack on strategy from a former director made weekend headlines.
A disappointing performance has seen Morrisons investors grow restless as they await the results of management's strategy to develop its online and convenience offering. Last month the group racked up a pre-tax loss of GBP176m on a near-3% drop in like-for-like sales.
Morrisons management, under CEO Dalton Philips and chairman Sir Ian Gibson, has insisted that its weak sales performance is largely due to its under exposure to the growth areas of the UK grocery scene.
However, 22-year Morrisons boardroom veteran Roger Owen told the Yorkshire Post that the group's issues stem from its failure to reverse the tide of shoppers flocking to discounters such as Aldi and Lidl.
Owen suggested Morrisons needs to be more aggressive in the fight against the discounters - cutting prices in a similar strategy to that employed to see off the threat from KwikSave in the 1990s.
"We maintained the standards, we looked at the prices. We have got the winner against any of these: it is called product range - it's massive," Owen said. "You have got far more choice in a Morrisons store than you will have in any of the discounters, ever. So why be frightened of them? Take them on, get in there."
While Owen believes Morrisons is failing to do what it needs to in terms of pricing, he also claimed the group is not executing its turnaround initiatives effectively.
In the rush to expand in convenience, for instance, Morrisons is failing to select appropriate locations, he argued. If this is true, Morrisons is likely to pay a heavy price. As has been proven time and again in the convenience sphere, even being on the wrong side of a tube station in London can have disastrous impact on footfall.
Owen classed Morrisons as a "supertanker heading towards an iceberg" and called for management to step aside.
Similar murmurings look likely to grow in volume as discontent continues to mount an Morrisons management is likely to feel even more pressure to perform - or pay the piper.
Five months after Cargill's rumoured interest to buy Archer Daniels Midland's cocoa and chocolate businesses came to nothing, the company today (2 September) announced a deal for part of the assets....
UK health leaders have called for an "emergency task force" to tackle the childhood obesity crisis in the country as, for the first time, they are faced with a generation of patients "who may predecea...
Tyson Foods has completed its US$8.55bn acquisition of Hillshire Brands, with shares in the Jimmy Dean sausage maker delisted before the market opened today (29 August) - and its CEO leaving the busin...
- BRICs and beyond: Fonterra, Beingmate partnership
- On the money: Mengniu hones in on "star" brands
- Comment: Competition to rise on whey investments
- just-food interview: Agropur CEO Robert Coallier
- Consuming issues: The hunger-obesity paradox
- Valio lactose-free trucks stopped at Russia border
- Heinz halves sugar in ketchup launch
- H1 profits down at dairy group FrieslandCampina
- Bisco Misr says Kellogg eyeing majority stake
- Valio targets China with EUR70m whey inve
- China - ISA Country Report
- New Strategies for offering Convenience in Food - targeting new occasions, best practice and new solutions
- Other Dairy in Russia
- David Chapman's Ice Cream Ltd in Packaged Food (Canada)
- Global Food and Grocery Retailing, 2013-2018: Market Dynamics, Retail Trends and Competitive Landscape