Speaking at Morrisons full-year results presentation, Philips emphasised the supermarket’s commitment to its core store-based food business and his vision to create deeper engagement with shoppers by providing an experiential and convenient shopping experience that crosses formats and channels.
Philips dubbed the large format general merchandise stores of his rivals as “soulless sheds”, calling hypermarkets “a blip on the pages of retail history”. He added that the future of non-food in supermarkets is online, rather than in big-box stores.
Morrisons will remain food focussed and will not become a general retailer, he says, but there are plans to grow its main non-food offer via a “clicks not bricks” approach to take a bigger slice of the £70bn online retail market.
Morrisons.com is scheduled to launch by the end of 2012, built on the foundation provided by the Kiddicare.com platform Morrisons acquired last year.
Philips says: “In any industry, winners focus on doing a few things well, not many things half-heartedly. Food will remain core to our business and our general merchandise offer will complement, not compromise our food offer … There’s no need to have space in store for things people will buy online. Certain categories that are emotionally engaging like baby equipment, will always need a physical presence but not everything.”
Morrisons will also extend its partnership with Peacocks to sell children’s clothes in store and last week appointed former Peacocks managing director Tim Bettley as its first non-food commercial director.
Morrisons online grocery operation is planned for launch by the end of 2013 and aims to offer something significantly different from what its rivals offer, based on its learnings from US fresh food business FreshDirect.
However, Philips stressed that unless Morrisons can deliver a profitable online grocery model the supermarket will walk away from the concept.
He added: “I don’t believe you should subsidise an unprofitable online business by making your core store customers pay more. Philosophically I struggle with that. The learnings we’re getting from our team in the New York make me feel confident that we can crack this in the UK but if the numbers don’t stack up we wont do it.”
Morrisons also outlined plans to open 20 additional convenience stores this year and a further 50 in 2013.