Morrisons boss Marc Bolland could not wipe the smile off his face yesterday. And he has good reason to smile.
In its preliminary results it reported like for like sales, excluding petrol, up 7.9 per cent and as the grocer nears the end of its turnaround plan, it has a lot more up its sleeve to come.
Bolland’s fresh and value offer has paid off and will stand the grocer in good stead going forward, no matter how the economic climate unfolds.
Morrisons’ fresh and value offer has helped it create market-busting promotions to draw in cash-strapped shoppers. Its fresh food deals for£4 have been winners for the grocer. The BBQ offer, for example, sold more than 1 million portions.
Bolland pointed out that as Morrisons has its own factories, it allows full flexibility in its offer. If the BBQ deal is selling well, it can pick up the phone to its factory and get more shipped straight away.
The same can’t always be said for the other grocers. Bolland said just one other grocer tried to copy its£4 deal but was completely sold out in one weekend. And that isn’t just Bolland having a dig – it has been widely reported that customers have been continually disappointed when they went to a supermarket to find a specific offer that had been advertised only to find bare shelves.
The fresh offer has also meant that Morrisons is continuing to win customers. It is the only grocer that is still showing growth in its organic lines and that must surely be from customers trading down from the more expensive supermarkets and buying Morrisons’ higher end products. And another coup for Morrisons is that again contrary to what other grocers say, Morrisons is winning customers from the discounters, not losing them.
The fresh concept will also work when the economy finally starts to recover. Bolland said it will take just eight weeks to completely revamp the offer in its Market Street concept, and provide more luxury offers in its fish and meat counters. Basically, it can provide whatever the market desires.
Bolland’s turnaround plan will conclude in 2010 and he has created a formidable competitor to the other big three grocers. But rather than just boast about what he has achieved, Bolland is eagerly looking forward to the next phase.
Morrisons is fast winning market share in areas outside of its northern homeland and has developed smaller format stores to ensure it can squeeze a shop in locations that it previously would have missed out on.
The grocer also has a whole world of growth still to come in non-food and online shopping. Bolland is right in his strategy to keep Morrisons’ focus on its fresh and value offer for the time being, but once more customers have grown to love the brand, non-food and online are huge opportunities.
With a clear focused strategy in place, Bolland has no reason to stop smiling.