Morrisons boss says marketing changes are paying off

Morrisons chief executive Dalton Philips has claimed that efforts to reset its marketing approach are paying dividends and customers have responding positively to new promotional and advertising activity.

morrisons

The supermarket made sharpening its promotional activity and improving its marcomms to better communicate its points of differentiation a strategic priority in November after several quarters of declining sales and lost market share.

Presenting the supermarket’s annual results to journalists today (14 March), Philips claimed attempts to make its promotional activity “bolder” and “more distinct” through initiatives that take it beyond base price cuts, such as “payday bonus” – targeted offers ahead of payday – have resulted in Morrisons “hitting its promotional stride again”.

The horsemeat scandal, he added, means the supermarket’s fresh food, UK-sourced positioning is resonating more strongly with customers.

“Customers care about where food comes from now, the provenance and quality of the food. They are angry with retailers that have let them down…..People are not angry with Morrisons. They are writing to us to ask to talk more about farms and the supply chain”.

The supermarket rebalanced marketing spend in February, Philips says, to press activity that talked more about provenance.

Perception of the Morrisons has improved markedly in the wake of the horsemeat crisis. According to YouGov’s BrandIndex rankings, the supermarket’s Buzz score – the net balance of positive or negative things people have heard about the brand – was 10.12 yesterday (13 February), up from 6.94 a month earlier. In contrast, big four rivals Tesco, Asda and Sainsbury’s all dropped over the same period.

The supermarket will be hoping improved brand perception will lead to increased sales. Sales in the 12 months to 3 February dropped 2.1 per cent in stores open for a year or more.

The supermarket has confirmed it intends to launch an online grocery offering by 2014 and is talking to Ocado about a partnership. Philips refused to provide any further information on the service but insisted it would go ahead with or without Ocado and that it would be a “Morrisons offer” and “distinctive” from rivals.

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