After Morrisons unveiled David Potts as its new boss today, Retail Week takes a look at what his five main priorities should be at the grocer.

Morrisons' new chief executive David Potts

Revamp stores

Morrisons chairman Andy Higginson made no bones about the fact that Potts will seek to do this as part of his strategy. Following Potts’ appointment on Wednesday, Higginson told Retail Week there would be a focus “on the core supermarkets” in a bid to “get some trading momentum back into those.” The grocer already has a programme in place to simplify store operations to make them cheaper to operate and simpler to shop in. IGD Retail Analysis said Potts will have “a fine balancing act to achieve these aims” to make sure the stores become “compelling retail destinations”. IGD added that Potts could further trim the store estate in order to “concentrate investments in stores that will deliver the best returns”.

Restore its reputation for low prices

Morrisons still has two years left to go on a three-year plan to invest £1bn in its prices, as it bids to re-establish its reputation for value. The grocer suffered more than any of its other big four rivals following the rise of the discounters and its investment in price comes at a time when price resets are taking place across the sector. IGD said Morrisons’ price cuts, the latest batch of which were announced last week, should provide “trading momentum.” But IGD believe Potts will seek to simplify the grocer’s Match and More card to make more of the loyalty scheme.

Leverage its vertically integrated supply chain

As well as the obvious challenge from discounters in terms of price, Morrisons will also need to fend off Aldi and Lidl when it comes to quality. Morrisons’ fresh offer, which benefits from being produced through a vertically integrated supply chain, is already well regarded, but more needs to be done to make its own brand a competitive advantage, according to IGD. Morrisons was the only big four grocer not to be hit by the horse meat scandal, but its efforts to highlight its focus on provenance failed to hit home with customers. 

Reassess online

Morrisons’ joint ecommerce venture with Ocado provided the grocer with an immediate route to market in the ecommerce space. But Shore Capital head of research Clive Black suggests Potts could reassess the partnership between the two retailers. The Ocado infrastructure has, however, allowed Morrisons to enter the market quickly having been slow to launch an online offer, providing a high-quality service from the outset. But as IGD points out, Morrisons’ online platform will require “significant investment” this year in order to reach more households.

Push further into the convenience market

While Morrisons was slow to launch an ecommerce platform, it also entered the convenience market much later than its big four rivals. Morrisons started to roll out its M Local stores at pace, but that has slowed recently with some outlying stores even closing. Potts will have to make some key decisions as Morrisons continues to catch up to Tesco and Sainsbury’s who both had a clear head start in the convenience sector.