Morrisons Grocery Insight

Nutmeg arrives in store

Nutmeg arrives in store

Clothing is an area I never thought Morrisons would move into, a limited non food assortment drew criticism from the analysts post Safeway who wanted more non food to boost gross margins. Ken resisted and clothing was an area that seemed completely prohibitive given the expense of starting an operation along with fears that come with being ‘off trend’ and the stock control / clearance issues.

Sir Ken and Bob Stott were dead against clothing and a wider non food range, indeed a press article with them both (a rare PR push!) indicated one of the Safeway warehouses they’d taken over was full of Levi jeans and mountain bikes. They sold the lot off and reiterated their intention to focus on food, the day job and shunned any efforts to increase their non food exposure with more categories like clothing.

Strategically, the longer plays of Convenience and online seemed to be inevitable despite Ken and Marc Bolland being against it, particularly with the market has moved. Dalton came in with a strong plan for core stores and promised investigations into convenience, online and multichannel. Of course the M Local estate continues to grow with a revised target of 250 stores by the end of 2013/14 being stated, boosted by HMV / Blockbuster and further sites including potential opportunities with the Arcadia space consolidation one of many potential avenues.

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Morrisons Sales Slide – Get Rid of Fresh Formats, Go Online! A Panic & Hysteria Special

Morrisons Sales Slide – Get Rid of Fresh Formats, Go Online! A Panic & Hysteria Special

When I first decided to start writing the blog in 2009, it was with an idea to redress the balance around the media and their short termism around retail and in particular Morrisons (my first love) with the Safeway takeover and indeed the years following that.

When Safeway were taken over, a business with some bright points but ultimately with failing business model. Morrisons were tasked with revamping a business 4 times larger, using their tried and tested IT systems rather than more advanced Safeway ones, similarly the product range was assorted to Morrisons specifications which meant some ranges were carried over – ‘The Best’ for example became the premium tier in the new hierarchy. Morrisons had never had a premium tier before Safeway.

Safeway stores were under invested in and required a lot of investment to bring them up to scratch, many were ‘rebadge’ jobs as the majority of CAPEX had to go into expanded counters, increased staff coverage and updated equipment. There was the assimilation of Safeway staff into Bradford as Hayes was closed down and far more than the required 52 stores were closed and sold off.

The amount of similarities between the  integration of Safeway and the current trading of the business with own label revamps, extensive refits in store are notable given the level and pace of chance currently ongoing.

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Hysteria and panic – It’s the half year for Morrisons

Hysteria and panic – It’s the half year for Morrisons

In recent years, the Morrisons results announcement had evoked a bit of anticipation as the markets wondered how much the like for like sales would be up and what the next initiatives would bring.

Recently though the market has slowed and with that so has the Morrisons performance. Christmas 2011 Q4 was up 0.7% but that wasn’t particularly well received by the city as it showed the first signs that the stellar business was slowing down from a sales viewpoint.

Q1 saw the first negative figures since 2005, with a flagging economy and increased competition from their rivals, it marked a turning point for the entire market. Flat figures and negative like for likes have to become more ‘acceptable’ considering the space race and continued growth appears to be over.

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Negative Q1 for Morrisons – What’s occurring at ground level?

Negative Q1 for Morrisons – What’s occurring at ground level?

After a negative Morrisons Q1 performance saw the first decline since 2005 and the tough comparatives such as the lack of a royal wedding and the colder weather meant that this year’s cold damp April a saw sales unsurprisingly down by 0.7%.

All things considered, it could have been worse, Tesco have reported consecutive negative like for like quarters now which underlines the need for the Phil Clarke masterplan of less new builds, more refits and more importantly better products.

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Get your tin hats on! It’s Morrisons Q1 results. What’s happening on the ground?

Get your tin hats on! It’s Morrisons Q1 results. What’s happening on the ground?

The year end results were announced on the 8th March and we now know M reported record profits and sales figures. With a feel good atmosphere for the business with the city, the share price reached a decent level and all seemed well with the business. The high price for this year being £3.20, it closed tonight (Wednesday 2nd May – £2.80).

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