DESPITE the improvement in like-for-like sales over Christmas, retail analysts have maintained a gloomy outlook for supermarket group Morrisons.
They believe it remains the most fragile of the Big Four, pointing to its major challenges in being able to re-enter the convenience market and its small online offering.
“These numbers are marginally better than expected but it’s still hard to believe they represent a new beginning for the struggling grocer,” said John Ibbotson of the retail consultants, Retail Vision. “The grim narrative for Morrisons remains much the same.
“Sticking to the core proposition of big superstores mainly in the north of England without a convenience or expanded non-food internet offer gives [chief executive David] Potts few options for returning to growth.
“Morrisons entered the Christmas period in near critical condition but despite these surprise numbers it remains in intensive care.”
Phil Dorrell, Partner, Retail Remedy retail consultants agreed, adding: “It is difficult to comprehend Morrisons strategic direction, selling off their M local stores at a time when this is the only format growing and then talking about selling off their vertical supply arm at a time when food provenance has become more and more important seems like madness.
“An opportunity for Morrisons is to develop their relationship and operation in forecourt retail (5 store trial with Motor Fuel Group) and quickly explode it out. Whatever it does next needs to be bold, differentiating and with conviction. Anything less is pointless.”
