There was a memorable interview with Dalton around Christmas last year in the Telegraph where he discussed a fresh based strategy and how well the company was doing around the snow. He then made a notable comment that gave an indication of where he wanted to take things with Morrisons.
stick to your knitting, thrash everybody in fresh foods, kill them
Dalton Philips, December 2010
|Early pic of Kirkstall, POS, display and ice have come a long way since.|
Marc Bolland had realised the strength of the potential fresh offer and set about changing perception, since Dalton arrived Morrisons were already differing on fresh by offering a number of extended lines across the market street. Of course, a couple of months before the article the lab stores launched with the Kirkstall store showcasing the new style thinking around fresh foods. Notably fresh Produce was merchandised loose and in some cases on ice to keep it fresh, there were other changes to the market street counters which prepare a lot of fresh food each day.
|Kirkstall has a ‘2 hour pledge’ on chickens – if unsold they’re disposed.|
Since Kirkstall had numerous changes made to it on an almost weekly basis, all eyes were on the rest of the country to see who would get the upgraded store first. An overall 9% rise in sales at Kirkstall doesn’t sound much but when you consider the fierce competition both from existing Morrisons stores and the wider retail landscape around Leeds, it’s a good result.
|Liberate helped to open up space in Kirkstall for kids clothing.|
Looking further afield, as Dalton notes in the interview cannibalisation is zero in the south, when Shrewsbury got the lab treatment after successfully trialing liberate, their sales grew with little loss from surrounding stores. Further south still, St Albans (blog due early Dec) and Woking – both ex Safeway stores were given the lab store treatment and as such as are now recording higher sales growth with no cannibalisation, all the sales growth is coming out of competitors in the surrounding areas.
A lot of potential in the model then, especially considering land being at a premium in the areas where Morrisons don’t have exposure, the opportunity to enhance their offer in existing stores with the revitalising lab treatment is a huge opportunity.
|Wrexham store exterior – (c) Morrisons.co.uk|
Naturally the space expansions continue apace with the new store openings, extensions and planning permissions going through all the time, both Woking and St Albans benefited from store extensions whilst they received the updated store layout but this won’t be possible in all stores. What is possible is the ‘fresh’ lab and a liberate programme which will increase the store appeal as well as freeing up space for further concession such as kids clothing where space allows.
Wrexham is an area where Morrisons has been under represented in recent times, with the nearest stores in Saltney, Oswestry and Chester being 15 miles from the new store in Wrexham, it was therefore a priority to fill this gap within the network and have a store within Wrexham itself.
The site for the new store is a former council depot which has drawbacks and benefits in itself, near the store appears to be a number of public sector buildings, a large ambulance station is sited next to the store with a large public housing office further up the road. A captive audience for potential customers experiencing the excellent food to go offering!
|Traffic on opening day – Ruthin Road – (c) Wrexham.com|
There are traffic concerns admittedly, the road on past the store is a single carriageway that was gridlocked all the way down past the store when I visited, it was opening day so perhaps the level of traffic isn’t indicative. Additionally the proximity to the ambulance station did raise concerns but access roads were negotiated as plans had to go via the Welsh assembly for final approval.
So, after negotiating the traffic and managing to park in a side road due to the full car park, it was time to take a look inside. I heard via the drums that Wrexham had been earmarked as a store of the future, the first new build where all the lab learnings were taken and put together for a new opening. Peterborough for example opened as an eco store but retained the old fixtures on produce, it did have the new signage but nothing else from the concept stores. Wrexham being the first to take everything plus some new bits and pieces.
|The first major difference – no yellow and ‘fresh market’ featured on signage.|
Externally the store looks great, with a wavy external design no doubt inspired by some eco friendly thinking, it’s clad in green, not yellow. In fact there is nothing yellow on any signage both externally and internally, even the opening hours poster traditionally yellow with green writing is replaced by the green / white colour scheme.
An interesting addition to the signage is ‘fresh market’ which is featured externally for the first time, risky? Fresh market isn’t a trading name of a store or a recognised sub brand (like Tesco Metro) but it does tell customers what to expect when they come into store especially as word gets around via Facebook about more stores getting the new Produce department plus the other features.
|The flower shop has now become a point of difference in store.|
As other retailers have reduced hours on the floral departments, with rivals rolling floral into the wider Produce department and having the man who fills potatoes also filling flowers, the department has been devalued somewhat. Morrisons
|Curved flower shop signage.|
|Very strong range of floral and plants in the flower shop.|
|Strong offer of plants and Christmas floral – plus strong themed POS, even on the fire door!|
With flower world supplying the new range anyway, it made sense to bring them in house to allow Morrisons to benefit from a stronger margin and transfer pricing. The sales increases in Kirkstall topped 40% from the flower shop so it was inevitable that such an increase would see the flower shop expanded across stores. St Albans, Woking and Swinton all have had the new flower shop added and Wrexham is no different, the offer seems to be expanding with the floral ordering service available in Wrexham along with seasonal additions such as Christmas Wreaths and indeed Kirkstall is now selling Christmas Trees!
|Christmas Trees available at Kirkstall.|
|The floral ordering service via Flower World is available in Wrexham.|
|More of a value focused offer here – 2 for £5 flowers.|
The main difference when you walk into the store is the fact that the Market St has become Market Square with deli, cheesemongers, fish and meat forming a square to encompass the fresh market, rather than the street seen in existing stores. A sign of changing the focus?
|Welcome to the ‘fresh market’.|
Previously the aim of the game was to get people to walk around the entire shop, so siting the Butchers at the top of the store would force people to walk around the dumpbins, stacks and tables with Morrisons offers on them. Thus driving up the sales per sq ft metric, however there appears to be a step change with this store, making fresh the real focus. Grocery is still important but a store to align the corporate strategy towards fresh makes sense, especially with the margins it will attract thanks to vertical integration and store crafted products.
|The Fresh Market square rather than the Market Street.|
Another moot point sure to divide opinion is the lack of a faux ceiling, Dalton targeted this as a saving via project excavate, taking out the faux ceiling saves a significant amount of money when building a store and Wrexham is another store (like Peterborough) to feature the natural roof.
|‘windows’ in the roof area allow natural light to pass through.|
There are additional windows within the roof that allow for natural light to pass through and light the store alongside the standard lighting but it’s bound to divide opinion. The specific lighting for Produce and the counters works quite well although the lighting unit looks a bit strange as it hangs freely over the fresh 2 go counter.
|Natural light via the roof but no ceiling.|
Your main shopper wouldn’t particularly notice but upon entering I noted the fact it sounded like a Wetherspoons pub, no music and a hubbub of chattering voices all merging together. I don’t think comparisons can be drawn to Asda/Tesco ceilings as theirs are usually far higher than the Morrisons one, however it’s a salient point that Kirkstall does look smarter than Wrexham from a roofing perspective but then there is more of a rustic market feel to Wrexham with the roofing as it is.
|Christmas decorations in an existing store – complete with ceiling.|
It all boils down to cost and with all areas of the business targeted to save on cost, then a faux ceiling if eliminated can remove an aspect of cost to a new build. Certainly looking at the expansion plans, if Morrisons can save £x per store by not having a ceiling then I’d wager it’s something they’ll do. There will be complaints and it will divide opinion but I don’t think your main customer would particularly notice it and crucially, will it affect sales?
|Fresh 2 go in Wrexham – more curved signage.|
|Counter is serviced rather than self serviced at Kirkstall – Soup here.|
|A strong pastry and cake offering too.|
There has been many a stab at getting fresh 2 go right since Kirkstall was remodelled with various versions of signage, serve over / self serve drinks, different sandwiches and now the serviced sandwich counter. Indeed a future blog will chart changes in Kirkstall itself so it’s interesting to see that they’ve really tested different variations with the latest going into Wrexham indicating they must be relatively pleased with it.
|The popular self serve salad counter remains.|
|Fresh 2 go offering pre made sandwiches, wraps and salads.|
A big difference with Wrexham is the addition of opened up counter areas, existing stores do have some display equipment removed it’s been difficult as many of the barriers are determined by building fabric. Wrexham doesn’t have that concern so all the areas behind the counters are fully open plan, it’s a theme of openness showing where food comes from and adds a bit of theatre to the shopping experience, every area that prepares food has this openness.
|With fully opened up back areas to view preparation.|
The store is roughly laid out 50% fresh vs 50% ambient with the vast majority of fresh foods in the fresh market area, ready meals, pizza and prepared meat/fish are all sited in the lowered fridges as seen in the lab stores. The in store prepared meat / fish is displayed in fridges near the relevant counter so there’s a clear flow throughout the store of associated product, the addition of freezers near fish and meat also drives customers to buy frozen meat / fish should they wish to.
|There’s that roof again! Plus the lower refrigerated units for fresh food lines.|
|Lowered refrigeration unit for Fish – sited near the fish counter.|
|In store prepared fish available next to the counter.|
|Next to the butchery is frozen meat.|
There is the clear display advantage of having lowered refrigeration units which drive the ‘halo’ effect as you walk into store, seeing right to the back of the store at Kirkstall and indeed seeing right across the fresh market at Wrexham means your interest is captured straight away. There is a myriad of units across the fresh market but it doesn’t affect customer flow, the neat tie ins with fish being near the fish counter, cheese near the cheesemonger is likely to drive complimentary sales too and help customer flow with the absence of standard signage and standard aisles for fresh.
|The great range of loose fruit & veg entices customers in to look.|
|A strong range of exotic fruit.|
|Loose and prepackaged vegetables merchandised in the side cabinets.|
The main ‘wow’ aspect of Kirkstall when it opened was the Produce and naturally that’s part of the store fittings here, almost a non event these days due to my focus on it in the past! It’s a great bit of theatre and customer comments were really positive towards the hydro pipes blowing vapour over the vegetables and the attractive display methods. The Produce department doesn’t have lots of display tables like Kirkstall, it appears to have a smaller range akin to the one at Swinton but nevertheless it’s a point of difference and markedly different to anything else seen in the UK.
|Hydro pipes enable Produce to be kept fresher for longer.|
Kirkstall has the space to the merchandise all their loose fruit in the main tables but as its a smaller display at Wrexham, some is displayed in the refrigeration units on the left of the store. Exotic fruit and some vegetables (above) are merchandised in this way and looks smart but lacking a bit of ‘wow’. However it’s positive that some stores like Swinton and Wrexham have smaller ranges which will add to Morrisons confidence that the model will lend itself to the smaller stores in the estate.
|Prepacked Pizza sited next to the Pizza counter.|
The Pizza counter is notable in that the popular theatre of seeing colleagues hand make pizzas continues with featured space within the counter for the guys to showcase their pizza making ability, it’s interesting that pre packed pizza along with Pizza Express lines are sited next to the pizza counter.
|Prepackaged Pizza, then the in store produced lines.|
|Visible pizza production along with in-store prepared pizza on either side.|
This keeps with the theme of prepackaged cheese being near the cheesemongers and other complimentary lines to drive sales but with the ‘liberate’ that went on in some stores for the ready meals. Stores lost the pizza space next to the counter and had to move them elsewhere which has resulted a sales decline, whereas ready meals are well ahead of an ambitious forecast.
|Oven Fresh features the 2hr guarantee for Chickens. Note the 5 for £1 on rolls.|
|The bakery features the ‘craft’ table – as seen in some Safeway megastores!|
All of the counters launched in store with Kirkstall learnings, there are new elements with the preparation tables but it’s clear that the lab at Kirkstall has worked and worked very well considering Wrexham has launched complete with these elements. The Bakery has recently had a changeover at Kirkstall with the ‘table’ showcasing the craft skills from the Baker, this has made the move from Kirkstall to Wrexham.
|More visibility in the Bakery along with bits of ‘wicker’ too for the typical Bakery look.|
I mentioned in the last blog that there had been a real focus on seasonal lines this year, with the Stollen winning an award in Delicious magazine beating the Harrods variety – not bad for £1.69! Wrexham has a separate table for seasonal lines, presumably it will feature any Easter lines, Hot Cross buns and the like once Christmas is over. It’s a good way to drive sales of these extra lines, especially as they represent strong value for money.Consider the fact it’s made in store so attracts a good margin and it makes business sense.
|Specialist Christmas / Seasonal table – note the improvement in quality of fixture.|
|Prize Winning Stollen!|
Morrisons also showcase the abundance of freshly prepared breads they produce in store, not just the standard loaves and bloomers but real craft lines with the Oktoberfest bread particularly noteworthy. It’s real points of difference and backed up by the traditional POS and better quality display fixtures bringing in a touch of class rather than the usual drab bespoke fixtures.
|Handcrafted bread – simple production methods = great results.|
A relatively large change is the absence of the ‘cake shop’ from Wrexham… well that’s not strictly true. It exists but it’s called the ‘Patisserie’. Coincidentally what Safeway called their Bakery / Confectioners, as do Waitrose! The range is roughly the same as a standard store but there’s a few of the premium lines seen in Kirkstall.
|Sweet treats, more specialist cakes available here whereas fresh 2 go sell standard lines.|
It’s still the Cake shop really with the same strong range of cakes attracting strong margins, the graphics, POS and offer is roughly the same as Kirkstall although there is a total absence of the chocolate fondue so perhaps it’s been canned due to space or the jury remains out on it.
|The Cake shop in all but the name.|
|Same signage and ‘feel’ across the store – extra Patisserie lines merchandised here rather than in ISB.|
|More display space in the main store – feat pink / peach signage and swirly fonts.|
There is a real focus on increasing theatre and whilst the loose Produce, hydro pipes and elements of visibility do that, Wrexham (and Kirkstall recently) have showcased a step up again in theatre and seeing the craft skills on display. It’s the most striking element of the store, the sheer amount of craft skills employed and just how much you can see and pushes Morrisons fresh credentials even further forward.
|Prep table for the Patisserie – you see everything.|
|Entrance to the Bakery – full visibility.|
|Freshly floured bloomers.|
The move to focusing on fresh as well as a wider package of strong promotions, pricing and availability means that Morrisons secure the profitability of the business with their excellent margin on all fresh product.
It’s a smart move and shows Dalton is pushing along with his bold claim made nearly a year ago about ‘thrashing those in fresh foods’. The convenience arm M Local have also capitalised on a market focusing on top ups by offering fresh food created in a main store before being shipped into the smaller store environment.
|Freshly prepared cakes attract a great margin and more can be made to capitalise on sales.|
The POS theme developed in Kirkstall with elements seen at M Local make an appearance too, a more softer font with departmental variations across the store. The black chalkboard style font appears across Produce as you’d expect but the Cake shop have a ‘groovier’ front with the POS featuring pink signage in an American diner style.
|Pink signage for the doughnuts – American themed.|
|Market lines feature the black / white chalkboard style.|
|The Flower shop also features a handwritten style signage.|
|Continual theme across the counter.|
After the Patisserie, there is the option to continue your shopping on past core Fresh such as yoghurts, milk and general dairy or turn around and continue to shop the fresh market which encompasses Cheesemongers, Deli, Meat and Fish counters. In between the deli and meat counter, there is space to walk into grocery with Beers, Wines and kids clothing before core grocery and frozen.
|Other half of Fresh Market starts with the cheesemonger|
|Deli with the space between meat to walk into grocery.|
|Butchers / Fishmongers together too – curved signage again!|
The theme of the counters providing lots of visibility into the back areas continues on the deli, it’s something that Morrisons have done notably well in Wrexham. Seeing everything that’s going on and with it being opening day there were a number of staff busy wrapping cuts up or serving customers.
|Cheese merchandised by strength – note the continuing theme of POS throughout.|
|Mellowing to stronger and medium flavoured cheese.|
|The cheesemongers flows nicely into the deli – note the Quiche POS on the left!|
|Deli Express remains offering deli offerings pre packed and priced.|
The cheesemongers continues to be popular and offers a wide selection of cheese with much of it pre packed to encourage self service, the merchandising principles of it being done by strength rather than region / country of origin continue. This has proved popular when trying to get customers to try new products – and of course is useful when trying to convert customers to own label produce which will drive the o2o campaign.
|Complimentary fresh products near the appropriate counter.|
The ‘deli meals’ have made the transition to Wrexham too, whilst not huge sellers in Kirkstall, it’s been re-advertised and given pride of place on the deli, the meals are cooked off site then sent into store. It’s simply a case of then re-heating the dish, there are portion prices and the option to buy the full tray (4 portions) for a set price. A bit like Cook! but without the aspect of freezing the food first, it’s a nice idea and I wonder if further items could form part of the range as it’s a potential winner.
|‘fresh’ deli meals to go available in store.|
Within the Deli is an self service Olive bar along with a wide selection of meats and hams, the Deli itself looks notably traditional and more belonging in a higher end store like Selfridges. There is meat hanging from the roof and in displays in the prep area along with a well stocked display area, advertising points towards Parma Ham being matured for 18 months and the focus is on quality and the expertise of the staff.
|Great range of cooked meats at Wrexham Deli|
|Featured advertising on specific lines – pointing to quality and age.|
|The Olive bar is part of the deli too.|
|Back of the deli counter – full visibility|
The Butchery and fishmongers are sited together in this store which I know Morrisons have wanted to do as it ties together the two prep counters, it also means the ‘dinner made easy’ can be merged to incorporate both food types. It’s been a challenge to grow sales of this deal within Kirkstall as the meat counter is sited at the back of the store, people who shop fresh in Kirkstall have done their meal shopping by the time they reach the counter so the idea is workable but suffers due to location.
|Always 100% British Meat.|
|Great visibility into the meat counter prep area|
|More theatre at the back of the Butchery.|
|Handmade sausages on site are another point of difference.|
As the Butcher and Fishmongers are sited together within fresh market, there is a higher chance that customers will go for the meal deal as it features in the core shopping experience, it’s a good deal with vegetables and meat included for £5 and is sure to be popular as Morrisons tighten up the ready meal category after the launch of M Kitchen in October.
|Meal deal incorporates Salmon on the display.|
The fish counter is also strong, the counter itself is notably strong and was very well presented. There is a new chiller that has just gone into Kirkstall that features a lower tier for wrapped product with the main counter featuring the actual fish counter, Wrexham doesn’t yet have this but St Albans does.
|Wide range of fish displayed on ice.|
|Fish has pre cut / fillets separated from the main counter with smoked at the end.|
|Strong range of Fish from the counter – Bit Safeway esque!|
That concludes the shopping experience in Fresh Market – the market square. I hope you’ve enjoyed, I’ve split it as it’s a long one anyway and I want to cover H&B / Grocery etc separately along with the Customer cafe and further thoughts. Naturally I’ll tackle whether there will be a wider roll out of store of the future too.
Part 2 to arrive Monday!