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Asda leaving market share on table for Aldi

Research published this week by Shoppercentric reveals that customers rate quality and service over price as critical factors in determining where to shop.

In the same week, Aldi reach new highs in market share overtaking Co-op into 5th position in the UK grocery market.

Coincidence?

Aldi and Lidl were in the right place at the right time, with discount prices on everyday grocery items. Price was critical at the height of the economic crisis and those prices were hard to ignore. Asda held their position well in those early days also benefiting from their price positioning.

In today’s market however quality and service are taking a lead. And Asda’s market share is still dropping.

Aldi have found a sweet spot

Prices are low, quality messages and premium products are evident and have traction and customer service is acceptable. What Aldi lack in time at the till, they make up for in friendliness and well stocked shelves with staff on hand and willing to point you towards your desired produce.

Asda have relied too heavily on price and haven’t been keeping pace with customer’s need for quality and service.

In the same Shoppercentric research, convenience stores saw the biggest gains (47% of shoppers used them in the past month – an increase of 4% on 2016) compared to supermarkets. Asda are in need of a convenience format if they are to regain lost market share. It is highly unlikely that they will launch a new format directly, but it has been mooted that they might buy a facia to occupy that space.

Asda can buy into the convenience sector can they buy quality and service?

Service can be addressed. Our productivity model has saved retailers millions of pounds already that has been re-invested into the business to support customer service and operations. It allocates resource appropriately across stores and schedules labour hours to maximise efficiency at store and department level. In store availability is improved, customer service is optimised and margins are supported through cost reduction.

What productivity modelling can’t do on its own is change organisation culture and quality perception. If there isn’t a customer service culture, change must come from the top and quality perception can come through marketing and an adjustment in key messages.

Aldi operates a model that Asda can learn from. Asda has brand equity that can be leveraged and together with operational effectiveness can deliver the growth that has been lacking. Naturally there is the temptation to look forward and guess how close Aldi could get to Asda’s market share. Closer than it is now is a certainty, but how close depends on Asda.

tesco booker deal

Tesco is Back

The Tesco we loved to hate has resurfaced with a surprising move to merge with Bookers Group wholesalers.

Tesco‘s confidence, while constant internally, is being shouted from the roof tops again. It is confident in its strategy and prepared to make bold moves. Once that meant buying up space to dominate the UK grocery market. It then evolved into buying retailtainment businesses to keep shoppers in store longer drinking coffee and eating out.

Reality hit and we saw the arrival of drastic Dave. Till now the drastic element has been somewhat tempered, it has been a steady incremental strategy until today. This is the biggest move of Dave Lewis’s tenure to date and one that has its supporters and its critics.

The key critic was non-executive director Richard Cousins who quit over the Bookers deal. He was in a “different place” to the rest of the board, according to Lewis. Perhaps his concerns have been played out across the media today.

Tesco secured a significant slice of the convenience food retailing sector

Subject to CMA approval, Tesco has secured a significant slice of the convenience food retailing sector, the sector that is experiencing the fastest growth. It also secures space in the eating out landscape, from coffee shops to Michelin starred restaurants.

The quiet success story of One-Stop is set to be played out with higher decibels in the coming few years, giving Tesco more than a foothold in convenience food retailing.

How will the grocers respond?

Morrisons took the Amazon route, Tesco the wholesale route, Sainsburys tried the discount route, and Asda, well what of Asda? Asda Christmas trading is expected to be weak, market share is slipping and they do not have any presence in the convenience sector. It will be interesting to see how Asda responds, but respond they must.

Sainsburys will continue to plough its own path, with online and convenience performing well and Netto binned. That said, Sainsburys do need to evolve in line with the customer to remain competitive.

The pros of the deal for Tesco are many

The pros of the deal for Tesco are many: scale, penetration into growth sectors, getting Charles Wilson onto the Tesco board, access to more click and collect sites. In fact it is hard to identify any cons.

For Booker, range and buying strength cannot be underplayed with this deal. It’s customers could also have access to Tesco branded ranges putting pressure on brands to compete on price. Marmite-gate anyone?

It’s a fascinating new chapter in food retail that is opening before us. Let’s not read too far ahead though, surprise endings are much more fun.

grocers christmas takeaways

The Grocer’s Christmas Trading Takeaways for 2017

We were all nervous but overall the grocery sector had a good Christmas trading period. We are still waiting for Asda to report which will bring the average down, but with the other Big 4 retailers all in positive territory there is reason to cheer.

Taking the discounters, Iceland, M&S food and Waitrose into the mix, we can see a few commonalities that are worth noting. (Sean Clarke, take note).

Premium

Aldi scored well on sales for premium ranges, as did Morrisons. Sainsburys has been the grocer to trade up to, but this year the grocers delivered a good enough premium range themselves to negate that need to go elsewhere. Sainsburys didn’t deliver a compelling-enough reason to coax shoppers away from lower prices and suffered a weaker like-for-like sales growth as a result.

aldi premium

M&S food sales growth was also at the lower end of the range. While the grocers have been developing range at very competitive prices, M&S have taken their foot off the gas. Waitrose delivered strong sales too, but Waitrose 1 which launched this year has helped add sales to the top line.

Takeaway: Premium sector is out-performing total grocery. Develop unique ranges building on current trends like free-from, invest in its branding and marketing. Don’t rely on price in this sector.

Availability

In our Christmas store visits we saw some shocking examples of availability with Morrisons topping the leader board. They moved to sales based ordering in 2016 which is never an easy transition and suffered as a result.

Morrinsons Christmas availability

Despite that they delivered a remarkable like-for-like sales growth. Imagine what it could have been if the ordering process had been further embedded. Waitrose too had patchy availability throughout the store leading up to Christmas.

The missed opportunity should be quantified and made into a screensaver for everyone in the businesses.

Takeaway: Quantify the missed opportunity each week from poor availability and use it as a motivator for process improvement.

General Merchandise

All the grocers saw a boost from general merchandise and clothing, building grocery transaction size with additional purchases whether it was a Christmas jumper of the must have toy of the season. Tesco saw a fantastic lift in toys, outperforming the market by 17%. Argos saw a 4% like-for-like sales growth which makes Tesco’s seem all the more remarkable at this competitive time of year.

Morrisons Christmas review

Morrisons had a very strong seasonal aisle and Sainsburys reported 10% like-for-like growth on TU clothing. This all plays into the supermarket’s core strengths: the space to stock broad ranges and in depth where needed and feature merchandising in store for key ranges.

Takeaway: Build on customer shopping missions and support them with ranges that are merchandised and marketed well. Don’t be tempted to try to increase range in convenience stores to take advantage of GM growth when it will compromise shopping mission.

Promotions

Tesco admitted that they lost sales to dropping the clubcard boost on general merchandise compared to a year ago, and Sainsburys all but eliminated promotions pre-Christmas.

waitrose Christmas

Meanwhile Waitrose did one day only timed category promotions that drove sales early in the season. These promotions were advertised on till receipts through the week. There was minimal incremental workload as a result as whole categories were promoted and did not have to be moved.

Takeaway: while a strategy that is based on EDLP is right for the market, there are seasonal events that need the lift to remain competitive. Remain flexible and consider mechanics that stay true to the strategy but also true to customer needs.

As mentioned earlier, Asda are yet to report but we envisage similar learnings to come from their trading update. Availability wasn’t always consistent, excitement and promotions were lacking and there is a gap where trade-up and premium could sit.

Christmas planning for 2017 will be underway already and these lessons will be taken on board. The landscape will continue to subtly shift in the meantime, the economic climate will see a not-so-subtle shift at some point, making it another interesting year of retailing. But we wouldn’t have it any other way.

Morrisons Christmas review

Supermarket Christmas Review 2016

With Christmas eve falling on a Saturday, and most supermarkets reporting their trading week from Sunday to Saturday, this coming week promises to be one of the biggest ever. In fact, most supermarkets will double the sales through their tills compared to a week in October.

We know the customer tends to move to the bigger sites for a one stop shop so it was timely to do a supermarket Christmas review and see how the supermarkets were set up for this big week of trading.  Here’s what we saw when we hit the aisles:

ASDA – Although troubled with falling sales this year and an eroded point of difference on price, ASDA are fighting back. We like the fact they have strong offers on the core Christmas shop. Having all the Christmas lines grouped together makes shopping much easier and they can show case their range. This could cause a bottleneck in the last panic days of shopping though.

General availability has improved, but there are still some problems to fix in household and pet. Service at the tills seems much faster, with plenty of people waiting to process your shopping.

Overall, our impressions was of a store in much better shape, but is that the result of the strategy or the fact there are less people shopping in their stores, so they are under less pressure? The one thing still missing is the ASDA fun shopping experience; unfortunately, it is still a bit dull.

Morrisons – Still getting to grips with a switch of ordering system, Morrisons core availability is struggling. Patchy availability in grocery, BWS and fresh will hurt them this year, but their Christmas and promotional areas are very strong.

Morrinsons Christmas availability

Market street, particularly produce, looks and feels well set up. Early in the New Year, high on the to do list is to sort the core availability issues out.

Waitrose – We like their marketing campaign giving the customer a day by day promotional calendar in the form of a till receipt. Knowing that Christmas dinner accompaniments were on offer last Wednesday did bring customers back into store. They range some exciting and interesting food products, but operationally core availability is a problem that still needs to be fixed. We saw significant gaps a couple of months ago, and they are still there.

Sainsbury’s – Set up this week is good but a bit underwhelming with the centre aisle lacking drama and the stores generally lacking theatre. Strong food performance has helped Sainsburys to stave off the declines seen at Morrisons and ASDA, and there is evidence food will continue to help them but it isn’t through price. The customer could get similar Christmas lines on offer for less at the other grocers.

sainsburys xmas16

We do think they are still missing a trick with TU clothing: the quality is good, and good value for money but the display and merchandising in store lets it down. Time for some real clothing experts to give this a shake up and get the return it should be delivering.

We do like the Sainsbury’s counters; the range is one of the best, if not the best of the big four. Set ups are good and consistent. Such a shame that in the stores we visited, customer service was let down at the checkout, slow and not enough tills open.

Tesco – Still heading back towards the dominating position they once held,  their focus on less peripheral business is paying off. Stores are full and checkouts well manned. It was also the best store for delivering Christmas theatre, with a great centre aisle or action alley, strong displays and Christmas music. The core offer is solid and there are plenty of deals on Christmas essentials and must haves, particularly the larger sizes. Checkouts were well manned and the staff seem to be happy and engaging. Tesco on a march!

tesco xmas 16

With the biggest week just kicked off, and the biggest shopping day of the year expected this Friday, it will be interesting to see who deals with the customer numbers the best. This Friday is predicted to exceed £3bn in takings. The customer can often be lured into a new shopping habits based on their experience this week, so while the lion’s share of that £3bn is nice, the potential for growth into the New Year is nicer still.

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Christmas on the High Street – Naughty or Nice?

The local celebrity has flipped the switch and the Christmas lights have been turned on. The High Street is twinkling but are the tills ringing this Christmas? 

We visited a selection of typical High Street retailers to see what they were offering to entice the customer into their stores this Christmas.

Fashion retailers have swiftly moved from Black Friday deals into pre-Christmas promotions that look remarkably like Sale. Clearly the weather will be the most used reason behind slow sales in the Christmas trading updates in January and with good reason. It has been exceptionally mild and retailers with heavy true winter stock need to clear it. If the weather man is right and we do get a white Christmas there will be some very happy customers out shopping. 

NewLook_Stamford_121216_2

In New Look we saw rail upon rail of jumpers and coats on sale with markdowns as deep as 50%. Heavy knits and long maxi fur collared coats are not very adaptable for warmer weather, nor are they very giftable. Being harsh, nor are they very fashion led. Hence the markdowns.

The Sale has been kicking off slightly earlier each year and this years feels earlier still. We are reading about many more fashion retailers going into sale this week so margins will be hit. Post Christmas will bring even deeper discounts and more stock being added but not enough to galvanise the customer to go shopping we fear, particularly if it stays mild.

There are a few exceptions. Everything in Fat Face could be bought as a gift. The brand has enough credibility and kudos to be giftable and the range has a winter wonderland feel to it. That said, the rails were well stocked and we do wonder how sales are against last year.

H&M is the other exception among our visits. In this case it is less about gifting and more about clarity of offer for a clearly defined customer at great prices.

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The product is attractive and works trans-seasonally, it is on the whole easy to shop, and ‘gets’ its customer. Yes, there are gifting ranges but they could be carried forward as pure Christmas product was limited to tight ranges.

Next also have missed the boat we feel. Fashionability was lacking as was quality. It feels like the offer has been product engineered to deliver margin but at the expense of desirability and representing good value. We have been big supporters of Next: strong operations, confidence in its offer  and promotional calendar but this year troubles us.

Away from fashion, most retailers have specifically bought Christmas gift ranges. WHSmith was notable in terms of its strong gadget and stationery gift offer at the front of the store.

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Range and price architecture ticked all the boxes and was unique enough to encourage the customer to buy it there and then. However, the depth of buy was weak; once it was slightly shopped gaps were evident. This was not exclusively the case for gift ranges either. Depth seemed to have been sacrificed in favour of breadth but without the luxury of space to merchandise it effectively. In fact we defy you to find the right colouring book on the shelf.

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The Christmas 3 for 2 gift offer at Boots was there again this year. A strong offer no doubt but at what point does the customer start to get bored of the standard beauty gift set? Yes it ticks a box but it is lazy, lazy for the customer and lazy for Boots. We must start to see something more innovative from Boots to bring the customer in. It it isn’t broken don’t fix it, sure, but be prepared for when it does break.

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Wilko was also reliant on the beauty gift set and meets the need of a different demographic. They supplemented the offer with a nicely priced gadget offer which was well shopped early in the season. As was their Christmas decorations. Range gaps had not been filled leaving empty space not delivering a return.

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Agile merchandising as ranges sell through is clearly not on the to-do list, and at this point in the season when there is still more than a week of shopping days to go, it is lazy store operations. On the other hand, FSDUs of tin foil baking trays and foil, aisle ends of greats value glasses, napkins and table mats was intelligent and was prompting add-on purchases in the store we visited.

In fashion, we will definitely see a mixed bag of results in January. Those that will have done well will be clear about the customer and have bought confidently with that customer in mind. They will have communicated the offer well and will have been agile in bringing ranges in front of the customer at key points in the calendar.

For general retailers the best will have bought clever and unusual gift ranges that stand well together but are not weather dependent. They will have been priced keenly for the demographic of the retailer and will offer a point of difference that makes the store destination. A product that could be picked up at Tesco and probably at a cheaper price will be sat on the shelf still in January.

Lazy ranging, lazy promotions, lazy store operations will cost the retailer dear.


For our review of department stores this Christmas go and read our blog. And watch out for our review of the supermarkets Christmas offers.

John Lewis Christmas 2016

Christmas in review: Department stores missing the point

Christmas time more than any other should be the time when we really get why great British department stores have survived as a shopping destination. This is when the shopping paradise of the department store,  all missions, all occasions under one roof, comes into its own. But does it? The format should resonate with time poor, convenience shopping missions but adds the theatre of Christmas and self indulgence. Yet this is not always the case and suggests flaws in the proposition for some Department store retailers.

Hats off to John Lewis who unsurprisingly come closest to the holy grail of maintaining a high standard of basic disciplines; good availability, clear signage, well thought through adjacencies, friendly customer service and fresh brands and ranges alongside established favourites.

John Lewis kitchen at christmas

Tasteful and cheerful Christmas décor and windows and the best and most shoppable Christmas department we’ve seen in some time project John Lewis to the top of the list. That said, stepping out of the Christmas thoroughfare to more utilitarian areas leaves you with a distinct lack of Christmas cheer, it is with too subtle high level decorations and gifting opportunities missed.

HOF1

House of Fraser pulled off a similar roll call of wins; the in-store teams managed the balance between friendly service and unobtrusiveness well, ranges were well laid out and availability was excellent. Where it missed the mark is for a mid-market shopper trading-up at Christmas, House of Fraser makes a confusing and patchy proposition, really strong in the good bits and badly let down by obviously unloved areas.

Each floor in House of Fraser feels like it is working independently of the others, putting together stables of brands for completely different customers and creating some very odd adjacencies in the process. There was not one customer who could successfully complete their Christmas shop there.

Gifting and Christmas ranges were tired and shoehorned in to walkways and atriums and category led departments such as eveningwear and coats were unloved and out of place amongst brand coups like The Kooples and Hallhuber. In the Oxford Street store, the tired customer has only a kitch afternoon tea for refreshment which after happily shopping strong menswear and womenswear offers, seems like a serious omission.

debenhams quirky christmas

Debenhams cycle of discounting continues apace with store wide offers on each of the occasions we visited. But behind all the 20% off signage we saw some real green shoots of a strong customer proposition coming together. The exuberant Christmas windows and in-store decorations were just the right side of quirky, giving the impression of a Debenhams committed to offering their customer upbeat and aspirational products at a price within range of the high street.

Christmas gifting at Debenhams was confident and abundant in contrast to generic product categories, where space was overfilled and rails overpacked with items only ever destined for the Sale. If Debenhams can wean it’s customers off the constant cycle of discount events, invest in shop floor staff engagement, reduce overstocking of the shop floor and maximise the opportunities left by the loss of BHS such as lighting and kids wedding-wear, this new fun, more confident approach looks promising.

selfridges Jarring Adjancency

The high end Department stores were much clearer in communicating with their target audience and more focused on delivering a tailored offer. Only Selfridges showed a wobble in this confidence – a desire to be everything to everyone meant some jarring adjacencies such as Lloyds pharmacy to Cowshed toiletries, or Mont Blanc to WH Smiths. Positioning in ladieswear and menswear was better, with clearly zoned propositions. The Selfridges customer is evolving though, top end brands serving as eye candy or for personal shopper experiences leaving the volume of trade in more contemporary, younger, more accessible ranges. This customer wants to feel every inch of the trade up but is still a high street customer too, investing in some key status pieces and enjoying the high end shopping experience.

Harrods was much more focused on true luxury with the exception of the tourist attracting Christmas and gifting areas. The super-brands and high end luxury floors all had customers shopping and browsing, a lot of the trade clearly coming from visitors making the most of the sterling exchange rate. The layout and store environment is appealing to the shopper used to the Middle East and Far East high end mall experience and the collection and curation of brands is confident and unparalleled making it the clear destination of choice for those with the budget to shop. This is a store that knows exactly what it is offering and to whom.

John Lewis Busters Garden

In summary, if the department store Christmas department is a barometer of confidence in Christmas trade this year we would only be backing John Lewis and Harrods. For Debenhams especially with its dominance in gifting this is a huge missed opportunity.

We would be advising department stores to be thinking quickly and honestly about the reason for being and what they can offer their customers to lift them away from the high street trudge and make themselves indispensable. Clarity of target customer will prove to serve John Lewis and Harrods well, the others lack that clarity and confidence and result in a patchy proposition that defies the department store proposition.

Whatever the budget, as a shopping destination these stores should feel special. By maintaining high expectations for your defined customer across all disciplines there is a huge opportunity to fulfil multiple shopping missions under one roof.

Paul Thomas retail consultant

CPC Strategy – Retail Trends and Predictions for 2017

Our Luxury Retail Consultant, Paul Thomas, was invited to contribute to CPC Strategy’s roundup of Retail Trends and Predictions for 2017.

Not surprisingly tech features heavily in future trends but as Paul says, while some will be heralded as the future of retail, none will be.

Read more here…

 

To explore Retail Remedy’s future trends further, read our blog post Retail Trends to Watch in 2017. If any of them resonate and are giving you cause for concern then pick up the phone and give us a call.

MW asda-store

Asda praying for a “Christmas Made Better”

Sales performance was significantly behind the competition reporting a 5.8% decrease in like for like sales for Asda’s third quarter. This has resulted in a market share slump, down significantly compared to a year ago, and puts Asda in a weak position as it heads into the lucrative golden Christmas quarter.

This is the ninth consecutive quarter of sales decline and the promise of a turn in fortunes is overdue. Project Renewal has yet to make a difference as far as we can tell but in a way, this is no surprise – an inward looking retailer will get the results it has always had without a fresh perspective.

It is early days in what has become a year of change in the board room at Asda, but we finally have a reason to believe that things will start changing. New appointments made from outside of Walmart will bring new experience and ideas into Asda, particularly when you consider that experience has been acquired at Co-op, John Lewis and Sainsbury. This might actually be the trigger for change, finally.

As much as the “Christmas made better” campaign lacks the blockbuster/tear-jerker/side-splitter formula so many retailers are adopting, the series of short sound-bite ads works for us. Each mini ad promotes a product or range that is worth heading to Asda for. They are almost old-fashioned, but they are simple, effective and memorable which is really the point, isn’t it?

Dodging the heavy price led messages of Black Friday feels like the right decision, bringing focus on good value through everyday prices suiting the demographic rather than getting drawn into what has become a fortnight of margin erosion and bringing sales forward. Talking of margins, Asda’s GP is reportedly holding up but with a weak sales line, profits are being hit. It’s all about volume for Asda now and that means traffic.

Asda survived the card reader chaos at the tills relatively intact given the magnitude of the problem and rode out hygiene concerns in delivery vans. But any further disruption to in-store payment or online purchases will only dent the already fragile sales line. We expect belt and braces approach from here on to prevent any further hit to footfall.

We get a sense of hope from Asda, and we don’t think it is unfounded either. But the bottom line is footfall. Traffic was down again in Asda’s Q3 so we are expectant of more to come from the management team to encourage that footfall. Price cuts help in the very short term, but are quickly matched or beaten leaving nowhere else to go. Asda can do better, and it is highly probable that they will do better.

 

Is it time for Marks and Spencer to stop digging?

Marks and Spencer have been trying to dig their general merchandise business out of trouble for several years but for now it seems that the time has come to stop digging.

Doing what you have always done just does not give you a different result and that is what has happened with their fashion. New leadership and a focus on design did nothing more than rack up a huge research bill. A high tech leading edge website resulted in another huge bill and no return on investment. Identifying Mrs M&S only served to give M&S’s current customer a persona, that same customer that was not shopping clothing.

If M&S are not on the verge of a seismic shift in its business strategy, they should be.

One way of getting new direction is to bring in new leadership at the top level. And by bring in, we mean look outside the building’s walls for talent. Steve Rowe has yet to make any impact and although it is early days we question whether he has the experience from other retailers to challenge the status quo.

Food sales have been the saving grace of the British institution, with growth propping up the declining general merchandise sales, and in particular clothing.

Clothing was always the core of the business, a sign of good quality underwear, school wear, twin sets and separates. But that customer grew old and the next generation were more fashion orientated. M&S didn’t move with the times.

We know we are stating the obvious here to any commentator or casual observer of the retailer’s history, but what is astonishing is that this was not obvious to the business itself.

Archive by Alexa, Autograph, Best Of British, Classic, Indigo Collection, Limited Edition, M&S Collection, Per Una, Twiggy are the brands under which womenswear is marketed. Each one of those brands is marketed to a different target customer with a different sense of style and taste, at different points of maturity. And yet, each cannibalises the other with product cross over. Fewer brands is a welcome message from Steve Rose but we still feel they are spreading themselves to thin.

It feels like, by closing stores and cutting jobs without an accompanying announcement on a new strategy, M&S are giving in. Or rather, they are still digging, but this time a trench to retreat in to.

Reducing cost will take the pressure off the profit performance but this will only be short term, and will not save themselves rich. Get the offer sorted out before worrying about short term profit. If they don’t, they could regret giving up that space one day.

M&S need to revive their flagging clothing sales by identifying the customer that has the biggest spend available to them. She might be younger than the typical existing customer, she doesn’t want or need such a wide range of brands, she will want to see range and price architecture though, and she will identify with fashion but is not a fast fashion clone.

She is confident in her style, something that M&S should learn from, and yes she is an existing customer already only she currently walks past the clothing rails in search of food.

Stop her in her tracks with clothes that she wants to be seen in, ones she can style in her own way. Give her size and colour options, and prices she considers good value.

On that note, we will happily pass the spade back to M&S so that they can dig the foundations for a revived and renewed fashion offer.

Morrisons stores

Morrisons building the momentum to withstand competition

Another quarter of like for like growth and Morrisons are within reach of a Golden quarter worthy of the name after too many weak Christmases.

Dave Potts has put in place a leadership team that could be considered a little myopic in the short term most coming from Tesco, but at least the team recognise what good looks like from their pre-Clarke years.

This team have pricing and store standards at the heart of the Morrisons turnaround. Focusing on delivering availability and keeping prices competitive (except perhaps Marmite at the moment) has helped restore customer’s trust.

The year ahead however, is unlikely to be plain sailing. The management team are making the right decisions but Morrisons lacks the same scale as its competitors and Brexit and National Living Wage will bring margin pressure that scale would help to buffer. Deals with Ocado and Amazon are pointing the grocer in the right direction, but the core business lacks depth of buy across broad ranges. Aldi are fast closing the market share gap and have a fraction of the lines of Morrisons.

In store visits we have undertaken, we have seen a lack of progress with Market Street. The capital spend in this area could be wasted unless clarity of vision is communicated to the store teams that are tasked with delivering it.

Productivity is one area where Morrisons have an opportunity if they employ improved methods. Great news for potential future savings but we are not sure they are best placed to be able to deliver the changes to achieve store efficiency without compromising the offer.

The control of inventory and flow of goods will only be improved through the adoption of their new, sales based ordering system. The transition from the old order writing to the new system may cause some hiccups along the way so we await with interest how they execute on this. Better than has been achieved on Market Street we hope.

The Morrison’s customer has not significantly changed, with an older perceived demographic than the other Big 4 grocers. Yet despite this they are growing. The job in front of the marketing team is to entice the younger and more dynamic customer into its formats. Once they are in, the even bigger job is to convert them to the largest counter service offer of all the grocers. This is not a way of shopping that the younger demographic are used to, considered slower and not as convenient.

We are about to be bombarded by the new season of Christmas ads and our interpretation of the teaser is that it will be traditional and family focused, a good fit for the brand. Our prediction is that this will be the last cheap Christmas before prices are affected by inflationary pressure so we expect price to play its role in the marketing message.

Morrisons have created some traction now but cannot afford to take their eye off the ball. We want to be able to look back in 6 or 9 months time and say Morrisons saw the new storm coming and were ready for it armed with productivity initiatives. Let’s see.