Speaking publically for the first time since joining Morrisons in March as the supermarket unveiled its half-year results, Philips says Morrisons will maintain its focus on fresh produce and will look at re-evaluating its own brand ranges and its approach to promotions in a bid to drive sales, increase efficiency and capture growth.
“Morrisons is different because of its fresh offer and I want to reinforce that difference and seize growth opportunities,” he says.
Philips outlined his three-way vision for Morrisons as the chain revealed a 9.1% sales increase to £8.1bn for the half year to 1 August.
Morrisons will trial online grocery and convenience stores in 2011, both previously untouched by the chain.
It will open three smaller format stores to test whether it can offer customers fresh, quality produce at the right price.
Online grocery will be trialled in a limited geographical area and Philips suggests that Morrisons may test more than one online model to discover which works best for its customers and its business.
“It has to be good for customers as well as good for the business because it you can’t make money online your core customers end up subsidising it through higher prices,” he says.
Philips is also introducing a “test lab” initiative which will mean four stores are used to test “high impact” innovative ideas across Morrisons’ strategy, products, range, merchandising and in-store space. If the trials prove successful and scalable for the business, they will be rolled out.
Philips also set out a plan to simplify Morrisons’ private label offering to drive sales.
Own brand sales currently reach £6bn each year, but Philips believes there is the potential to grow this as Morrisons currently under indexes in terms of own brand sales compared to its rivals.
“We need to further differentiate our own brands and make it easier for customers to shop the range”, he says.
Philips plans to give a full update on Morrisons’ strategic options in March when the supermarket delivers its full year results.