Ocado boss Tim Steiner has defended Morrisons’ fledgling online grocery service after early research indicated the much-hyped launch in the Midlands failed to entice customers.
Less than 1% of eligible Morrisons’ store shoppers – who had previously shopped elsewhere online – tried the new service in January, according to SBXL’s Continuous Shopper Insights survey. This was despite the launch being heavily trailed in the pilot region.
The service started in Warwickshire in January and this week Morrisons extended it to its Yorkshire heartland.
The SBXL survey of 3,000 shoppers showed that in October to December, 26% of Morrisons shoppers said they intended to shop online for food over the next year. The figure rose to 30% when 1,000 shoppers were polled in January.
The study found that Morrisons’ customers in the South are less likely to shop online than those in the Midlands or its northern heartland.
It showed 45% of all shoppers in the South of England intend to shop online in the next year. However, just 22% of Morrisons’ southern shoppers said the same.
However, Steiner dismissed the idea the Midlands launch had not gone well. He told Retail Week: “The early indications have been very positive and it launched on time.”
Morrisons online food managing director Simon Thompson said this week that pre-bookings for Yorkshire deliveries had exceeded those in Warwickshire, despite the Midlands launch covering a larger region.
Morrisons chief executive Dalton Philips is fighting to turn around the ailing grocer after like-for-likes plunged 5.6% over Christmas. Last month, online executive George Dymond left Morrisons just weeks after joining.
Steiner said: “Morrisons is not a business in trouble. It’s a business making hundreds of millions of pounds, so it has the ammunition it needs to put capital into growing channels.”
The Ocado chief’s comments came as the etailer posted widening pre-tax losses to £12.5m from a £600,000 loss last year as it invested in building scale.
Ocado posted gross sales up 17.2% to £843m last year.