Morrisons saw like-for-like sales rise 0.7% in the three months to 1 May. During the quarter Morrisons also launched its Easter TV campaign – the first major above the line spend since the supermarket appointed Publicis London as its ad agency earlier in the year.
The campaign was a springboard for Morrison’s new brand proposition ‘Morrisons Makes It’. And speaking to Marketing Week on a press call this morning (5 May), Potts said the marketing message had “struck a chord” with the public and contributed to sales growth.
“We’re pleased with the marketing campaign as it has contributed to transactional growth. The little girl in the ad who goes to break open the doughnuts and Dad thinks he will get half but she gives it to the teddy. Well, we are selling two million extra donuts a week as a result of that.
“Inbound sentiment on digital and social media is great and we’ve got a lot of requests asking for the teddy so we could go on to sell that too,” he explained.
He added: “The ad that shows our fishmonger has helped us grow fish pie sales from 1,000 a week to 18,000. I believe the marketing campaign is well received internally and seems to resonate and strike a chord externally so I think there will be a lot more to come from Morrisons Makes It.
“What is is truly important is the fact we are both a foodmaker and a shopkeeper. Not a one club golfer.”
David Potts, CEO, Morrisons
“We know Morrisons Makes it communicates that message but also translates the importance of the people inside Morrisons – that combination is very important for future of the company and the brand.”
A commitment to lowering prices
Last week, Morrisons announced further price cuts on 847 items. Potts described the lower prices as “crucial” to the Morrisons offer, adding that during the first quarter its prices were down 2.6% from a year earlier.
As part of its ‘Price Crunch’ strategy, Potts said Morrisons would continue to cut prices in 2016, describing last week’s cuts as only the “second round” of activity. Attractive price cuts, he said, also helped Morrisons achieve a 17% rise in sales from its ‘Food to Go’ range, which includes freshly-made sandwiches.
Potts also gave an update on Morrisons’ deal with Amazon, revealing that it had sent 800 ambient grocery lines to the online retailer and suggesting that Amazon would start its pantry delivery orders “imminently”.
Word of mouth buzz
Ultimately, Potts claimed word of mouth buzz had returned to the retailer and that having raised staff wages by 20% over the last year, morale was at a high.
He concluded: “We have a lot to play for. Customer satisfaction is up on last year, it looks to be on a good trajectory. The word of mouth buzz is that Morrisons is back on form.”
Data from Kantar Worldpanel earlier this week suggested that Morrisons’ sales were down 2.6% in the 12 weeks to April 24 amid a general slump in sales at the big four supermarkets.
Yesterday rival Sainsbury’s reported a 0.9% fall in like-for-like sales in the year to 12 March as its chief executive Mike Coupe insisted that its quality message is not getting lost amid an industry-wide focus on price.