Morrisons has fired the starting gun on expansion in the south, defying market trends against space expansion.
The Bradford-based grocer said two thirds of its 2.5m sf ft expansion drive, which started last March and runs for three years, will be in the south.
Morrisons, which has nearly 500 stores, is underrepresented in the south and believes its Fresh Format store design allows it to cater to a more affluent consumer without alienating its core market.
Chief executive Dalton Philips said that there were significant opportunities for growth without cannibalising sales and indications from Tesco and Sainsbury’s that store expansion would slow down would not be echoed by Morrisons.
Philips said: “We are going be food focussed, not a generalist. We believe that UK grocery has got very functional, which is not what we’re doing.
“Our new format allows us to see how we perform with different demographics, you will always go on tweaking the format but we have an offer that really travels in the south.”
He added: “If we have our fair share of market share in London, it would be another £1bn of sales. It’s a very attractive market for us.”
Philips countered the argument that the format, of which there will be 43 open by the end of the week, may alienate its core customer claiming the format “shouts value” and is performing well in less affluent areas.
Morrisons will reach two million of the six million customers not currently within a 15 minute drive of the grocer in the next three years.