Morrisons ‘most distinctive’ UK grocery brand, says incoming chairman

Morrisons will look to “make more” of the key differentiators – fresh food and provenance – that have made it the “most distinctive” grocery brand in the UK as it hunts for a new CEO following the sacking of Dalton Philips.

Incoming chairman Andrew Higginson, speaking on a media call this morning following the announcement, said Morrisons is after a “fresh pair of eyes” that can help it build sales momentum.

In response to a question from Marketing Week, Higginson said he sees the fact that Morrisons owns its own supply chain as a key differentiator and one it hopes to better communicate to customers in the future.

“In observing Morrisons as a competitor [in his previous role at Tesco] one of the things that stands out was that Morrisons is the most distinctive of all UK grocery retailers. It has control of its own supply chain and an emphasis on provenance and fresh food – these are wonderful assets.

“We need to make more of that, to build on the good work done and let customers know just how much we put into that fresh food chain on their behalf,” he said.

Restoring trading momentum

The new CEO will almost certainly come from outside Morrisons, with Higginson adding that the role requires someone with experience – either in retail or a chief executive.

“This is not a job for people with ‘L’ plates on. We are looking for people with experience who can restore trading momentum in the business.”

Andrew Higginson, Morrisons incoming chairman

“We will cast the net widely. This is a great business so we have the luxury of attracting great candidates. This is not a job for people with ‘L’ plates on, we are looking for people with experience who can help restore trading momentum in the business,” he said.

Higginson made clear that Morrisons is not looking for someone to radically shift Morrisons strategy. Philips did that with investments in online and convenience, as well as price and loyalty.

Instead, it is looking for someone that can execute that strategy in stores and in the way the brand is portrayed.

“The main thing is to build on the very good work launched in March [at the strategy update]. We want more customers buying more food to get volumes moving. That is the lifeblood of the supermarket industry. That remains and will be the sole focus. There are no plans to fundamentally change the strategy, it will be tactically how we build sales,” added Higginson.

That will involve a series of initiatives to “do more” for customers, initially focused on price given moves in the wider market. Morrisons remains on track to invest £1bn in price as part of its three-year turnaround plan, while rivals have also pledged to bring down the cost of branded and fresh products.

Higginson also said he sees a need to invest in better service to help differentiate from the competition and innovation. Market Street will remain an “essential part of the offer”.

“Rebuilding lost trust”

Morrisons sales have been hit by its late moves into online and convenience as well as the rise of the discounters. While its 3.1% like-for-like sales decline over Christmas was the worst of the major supermarkets, it did show signs of improvement.

The Kantar Worldpanel figures once again showed all the big four supermarkets losing sales and market share, while Aldi and Lidl saw double-digit sales growth.

Higginson admitted there would be no “quick fix” as all the big supermarkets look to rebuild lost trust with consumers.

“All the supermarkets in the last few years have to one degree or another pushed the price agenda a little too hard and that has undermined the trust of customers in the price architecture.

“For 20 years we dealt with them [the discounters] very effectively but through the recession supermarkets, led by Tesco, took more out of the shopping basket in an attempt to deliver bottom line growth than they should have done.

“Correcting some of that is a long game but we don’t fear the discounters. Their model is effective but it’s not a great shopping experience. There is a great opportunity to compete with them but volume growth, getting more people in stores, these are essential parts of the mix,” he said.

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