morrisons trolley handle

Morrisons missing the value mark

If Morrisons is to make up for its first half shortfall they will need to pull out all the stops in Q4 because Q3 was another quarter of lacklustre sales. If we were being honest that is a very long shot, we have seen nothing yet to understand how they are going to drive more footfall into their stores in this most important of all quarters.

A like for like sales decline of 2.6% could have been worse so for that, Morrisons should feel relief. But it does reflect its currently weak proposition in comparison to the discounters who pose the biggest ongoing threat.

The weak spots we perceive are around value and in-store excitement. Morrisons is competitively priced relative to the other Big 4 supermarkets, thanks to the price cuts carried out since David Potts arrival earlier this year. However that has not translated to footfall and sales. The price cuts helped to retain existing customers but did not attract new ones.

What was missing was a bigger value message, in fact they have seemed to have almost scaled back their marketing. Their shops are a bit tidier, a bit more organised with some better pricing in it, but we were expecting a little more, a plan of change that included the customer and the marketing to drive them in. What we have is better retail execution and a better retail operation, things that we would have expected David Potts to deliver.

Morrisons Market Street

Photo by John Angerson

Market Street should convey the quality and provenance of its fresh produce but it falls short. It is front of store and should entice the customer to purchase but the format looks dated even in the most recent store refurbishments. Although the misting machines were dropped, they did add a little drama and modernity which is now lacking.

Morrisons changed Match and More in favour of a ‘simpler’ points programme: spend more, get more points which can be redeemed into vouchers to be spent in store. The conversion of points to pounds though is far from attractive, with the customer needing to spend £1000 in order to earn points for a £5 voucher and looks like Clubcard’s younger and less effective younger brother. The new terms were launched on Monday but we would suggest that it needs to be revisited quickly before the golden quarter ramps up.

morrisons staff

A new initiative to make fresh sandwiches in store to compete against High Street sandwich chains is a further attempt to project a quality image on to its fresh produce. However this just doesn’t feel like a good fit for the supermarket, missing the target customer and in the wrong store format.

Morrisons feels like it keeps missing the mark and therefore has an uphill struggle ahead, more so than it has faced so far this year. Christmas is coming and probably too quickly for David Potts and his team, yet the Morrisons full year profit forecast remains unchanged. They must know something we don’t.


If you feel your business is missing the mark, get in touch and let’s see how we can help you.

 

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