“Capital light, returns enhancing” measures will propel Morrisons forward
A YEAR on, sales at supermarket chain Morrisons are beginning to stabilise, according to management, including chief executive David Potts.
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This year’s results provide a more positive and optimistic outlook, after an expensive 12 months which saw the disposal of M Local stores at a cost of £121m as well as a £60m restructure. Seven of the store closures announced will complete in April, bringing total closures to 28.
Management itself has been cut to 66 people which the business hopes will create a “strong and diverse” base to “drive the revival of Morrisons.”
At the announcement of preliminary results yesterday, Mr Potts said that although the turnaround was a long journey, the business was making steady progress.
Citing its Price Crunch campaign, with 1,000 items cut, as well as a renewed focus on in-house manufacturing, Morrisons leadership said they had a unique proposition they would build on going forward.
Investing in manufacturing facilities such as its Grimsby site, where Morrisons smoke their own fish, will provide the business with “flexibility and speed.”
An experiment with the Merrion Centre store in Leeds saw an increase in footfall of 5% after a rebrand and focus on local demographics: students and city centre residents.
Mr Potts said that this was an example of “local solutions providing natural benefit”
Owning 85% of stores has allowed the business to have greater control over refurbishments and the evolution of the in-store offering. With dozens of cafes already refurbished,
But he said, price cuts and job cuts were “much more than cost cutting,” though the business is confident of saving £1bn in the coming years.
Improve relationships with suppliers will mean simplifying 37 different types of commercial income to three.
Mr Potts finished: “There is an affection for Morrisons… and as we provide more of what customers truly value about Morrisons there is the opportunity to increase the popularity of the brand.”
