A disappointing Christmas may have sealed his fate, but history may come to look more favourably on Dalton Philips’s tenure at Morrisons.

A disappointing Christmas may have sealed his fate, but history may come to look more favourably on Dalton Philips’s tenure at Morrisons.

His championing of online and convenience has the potential to turn the brand’s fortunes around – even if it failed to save his neck in the short term.

Morrisons’ Christmas numbers, though bad, were an improvement on what proved to be a pretty woeful 2014. 

Last year’s AGM – at which the chief executive was heckled by the chairman – was a particular nadir.

Yet the embattled grocer has a loyal and talented team of senior people who are as frustrated as anyone about the brand’s loss of direction.

Philips’ departure in March will offer the grocer a welcome chance to restore some of its dented confidence. 

The new chairman Andrew Higginson is well liked and respected in the industry, and by Morrisons insiders.

His first task when he formally takes the role next week will be to find a dynamic new chief executive who can help make the changes needed, but above all build on Morrisons’s existing strengths.

Potential

Morrisons has a good regional spread of stores and potential for growth that the other big three supermarkets don’t.

Morrisons’ online operation has found its feet, but is still small. Done right, this could be a fantastic engine for growth.

Similarly its small store strategy is in its infancy. Compared with Tesco – which has saturated several regions with its convenience stores – Morrisons has room to grow these profitable small outlets.

Sound fundamentals

Morrisons also has the most vertically integrated production model of any of the UK supermarkets.

This makes its own-label products highly profitable and ensures robust and clear provenance, which is an increasingly important differentiating factor.

There is no need for Morrisons’ 2015 to be as bad as its 2014.

Despite its many obvious problems, the embattled grocer remains a solid business – or at least it would be if it could get its offer right.

Improving its dated presentation and tired public image have to be priorities.

Morrisons’ marketing has been poor for years and it needs some real muscle to convince people its stores are attractive again.

Its cheap prices USP may have been expropriated by the discounters, but if it is bold enough there is every chance it can recapture the attractive market niche that it created and then lost.

  • Phil Dorrell is director of retail consultancy Retail Remedy