Morrisons disappointed the City yet again last week with a below consensus 7.1% plunge in like-for-like sales excluding petrol.

Morrisons disappointed the City yet again last week with a below consensus 7.1% plunge in like-for-like sales excluding petrol.

But boss Dalton Philips remained upbeat, despite admitting the next few months would still be choppy for the grocer because it will take some time for the 1,200 price cuts it unveiled a few weeks ago to resonate with customers.

Philips also insisted his price cuts strategy has the backing of his investors. Having just finished a roadshow taking in more than 150 financial institutions, he acknowledged they would “hold our feet to the fire” over the plan’s execution.

The ‘I’m Cheaper’ push has certainly taken over the nation’s billboards and some investors are relieved that Morrisons is taking strategic steps to tackle the rise of the discounters.

Whether customers will understand the ‘I’m Cheaper’ slogan is debatable – does it mean Morrisons is cheaper than the discounters, or does it mean it is cheaper than it was a couple of weeks ago? Maybe it is supposed to mean both.

Sainsbury’s cast doubt on Morrisons’ price cuts, maintaining that the Bradford-based grocer was merely playing catch-up with the rest of the market onpricing. Sainsbury’s said it had been adjusting its prices over the past couple of years to bring down average prices, and therefore run less deep promotions.

But while rivals will always try to stick the boot in, whether Sainsbury’s is right or not doesn’t matter. Morrisons’ core customers have fallen out of love with it and they need to be persuaded that it can cater for their needs once again.

The habits that have become ingrained since the economic downturn show no sign of changing. In Morrisons’ case, perhaps the most important shift it needs to contend with is its customers doing a big shop in its stores, but then going up the road to a discounter for cheaper basics.

Philips is right when he says it will take some time for customers to tune in to Morrisons’ cheaper prices, and to trust that they won’t just go back up again.

Morrisons needs this plan to work desperately. The price cuts are a start, but there needs to be more effective marketing to ensure the message gets through, and customers believe it over and above the raft of price messages out in the market.