Morrisons chief executive Dalton Philips is a man straddling two opposing viewpoints on online retail.

Despite investing significant capital into learning how to create a transactional food website from Fresh Direct, Philips is ready to walk away from the website if the model is not right.

Morrisons said it will update on its plans for grocery online later this year in reporting an 8% uplift in underlying profit to £935m today.

On general merchandise though Philips is the Bill Gates of supermarkets, online’s biggest advocate, declaring “big box stores will become a blip in the history of retail”.

Philips told Retail Week: “There is no need for soulless sheds, shoppers want skilled people on hand. The future of general merchandise is not big box, it’s to be delivered in a cardboard box.”

He offered a vision of the future to his counterparts at Tesco and Asda. “You will be left with 100,000 sq ft stores scratching your head saying ‘what do we do with these?’”

Philips believes that Morrisons’ optimum store size is 38,000sq ft. The grocer is using its Kiddicare site to test online platforms and believes the baby products retailer offers the only general merchandise that is really essential in a store because parents need “emotional engagement” with children’s products.

But on the flipside, Philips is adamant he will not be drawn down an online grocery route – with a site set to launch next year – if the model and proposition is not right.

“If we cannot do it in a compelling and profitable manner we will not do it at all. I do not think you should subsidise online customers by charging your core customers more,” he said.

Oriel Securities analyst Jonathan Pritchard disagrees. “We remain hopeful that management will bring Morrisons into the food battle as we think it is a ‘must have’ as opposed to a ‘nice to have’,” he says.

Morrisons has been learning from Fresh Direct – in which it has a 10% stake – in New York, where the market is fierce with competitors Peabody, Soap.com and Stop & Shop among those competing hard for share.  

Philips claims the key driver in Fresh Direct has been highest quality fresh food, something that remains at the heart of Morrisons’ business.

The Irishman maintains that new ventures in convenience – there will be 20 more M Locals by the end of the year and a likely 50 more next year – online and expanding general merchandise will not take Morrisons’ eye of its core focus – selling food.

Getting the roll out of its Stores of the Future concept – now named Fresh Formats – right will be key if Morrisons is going to capture spend in the core chain.

The new format has increased space for fresh food, stripped back counters to allow customers to see food production and enhanced ranges and is arguably second to none within the Big Four.

But if this doesn’t represent the bulk of its 475-store chain it could remain immaterial in terms of long-term impact on group performance. Moreover, it may have shown its hand in time for rivals Tesco, Asda and Sainsbury’s to respond.

Shore Capital analyst Clive Black adds: “We ask has Morrison perhaps spent too much time perfecting its approach rather than engaging in implementation so allowing the competition to gauge how to respond whilst the consumer economy remains firmly unhelpful?”

Philips looks like he’s spinning a lot of plates at the moment and not marrying together an overall strategy for food with general merchandise online may put Morrisons further behind the pack in digital.

But his vision for consumers to be able to shop at Morrisons online, locally and at reasonably sized out-of-town stores may just prove the right tactic.

“We want to focus on doing a few things really well rather than many half heartedly,” he says. A man with his sleeves firmly rolled up and ready to take on a task.