Blog: What is the trouble with Morrisons?
Katy Askew | 8 November 2012
As a shopper, I am a newly-converted fan of Morrisons. They opened a store near me on the south coast two weeks ago and won me over instantly.
It was a rainy Saturday and all the supermarkets were filled to capacity and beyond. I was on a quest: I needed to get some wafer thin beef - but not the stuff that comes pre-packed. I wanted someone at a deli counter to cut it for me. I dragged my increasingly short-tempered small children in and out of the car as we visited literally every major competitor, until someone said "they might be able to do it at that new Morrisons".
New Morrisons? Well, I've read and written a lot about Morrisons Fresh stores. This was my first time to experience it as a shopper. And I was quite impressed. I liked the misters over the herbs. I liked the vibrant-looking fresh produce area. And I was especially keen on the fact that they had a deli counter where an actual person would actually cut some actual beef for me. The fishmonger even gave me some cooking tips.
And, walking around the shop, it was interesting to note that the staff seemed engaged and energised. Maybe it was just the excitement of newness, but I even heard some people stacking shelves comparing Morrisons to the "dinosaur retailing" of another player.
This is an actual point of difference, I thought. So why then is Morrisons the laggard of the group, with declining sales and market share under pressure?
According to the assessment of Morrisons management, the company is failing to communicate its offer to consumers.
If this is correct, it is quite possible that the drop in same-store sales - which was greater than the overall market - could be partially explained if Morrisons' existing customers are cutting spending more sharply than the average shopper. This seems plausible given the economic climate and Morrisons' strength in the north of the country, which has been more hard hit by the downturn.
However, the suggestion that Morrisons' new direction is turning off existing shoppers seems less likely. Sure, it is possible that not everyone is as wowed by herb misters as I am. But Morrisons has not pushed any of its changes through at the expense of price.
So, as Morrisons works to more effectively communicate the changes brought in under Market Street while simultaniously opening new stores, particularly in the under-represented south, and pushing into convenience retailing, perhaps it is just a matter of time before it wins over more shoppers looking for wafer thin beef.
There has been a rise in the number of food companies in the UK filing for insolvency - and the intensification of competition between the country's grocers has been blamed....
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