The results will be poor. That is already clearly flagged especially after the disappointing Christmas trading figures. Sales are likely to be down around 1%, market share has fallen and profits will be lower.

So – where next? There are more reasons for optimism than one might suppose.

The major shortcomings of the business are being addressed:

  • A clothing range has been in larger stores for a year
  • An online service has now been launched in conjunction with Ocado. It is very early days, but it now at least has an online offer
  • A C-store chain is being developed. There are around 100 M Locals already
  • Systems were in need of updating but a major investment to upgrade them has started

 

We have also often pointed to the hangover from the Safeway acquisition, particularly that it has left the company with an almost identical customer base to Aldi and Lidl – the top performing food retailers at the moment and hardly a comfortable place for Morrisons to be in. But recent consumer research from Mintel shows that customer satisfaction with Morrisons is on a par with Asda and a long way ahead of Tesco. It may even be beginning to attract some younger customers. On the whole Morrisons’ customers are happy with what they find. Morrisons has been losing out because of the things it didn’t offer – online and C-stores – but that is being rectified.

We don’t want to make light of the challenges still facing the group, but we think that the evidence suggests that we could well be at the bottom now and the business should be able to start on a recovery.

Richard has over a decade of experience leading on retail research for Mintel and his expertise is continually sought from both Mintel’s clients and leading national and international media outlets around the world. Before joining Mintel, he worked as a City analyst and as a journalist.

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