Morrisons marketing chief: online grocery retail not profitable

Supermarket Morrisons will not be moving into online sales in the ‘short term’ as “grocery online retail has not yet been proven as a profitable model,” according to marketing director Michael Bates.

Bates made his comment at the Marketing Week brand summit in central London today (25th February).

He had told delegates how the supermarket managed to steal market share from Tesco and Asda and save the brand from freefall after its 2006 Safeway takeover pitched the brand into new parts of the UK who viewed it as “a byword for pies”.

He added the supermarket was planning a new advertising campaign featuring celebrity gardener Diarmuid Gavin later this year to support expansion of its nationwide ‘Lets Grow’ initiative which works with schools to teach pupils about growing fruit and veg.

However, despite the success of the rebrand and advertising campaigns featuring celebrities such as Denise Van Outen and Richard Hammond, Bates says the supermarket wants to increase its engagement with offline customers and store staff before it expanded into online retailing.

Tesco, Waitrose and Sainsbury’s all run online grocery stores. Ocado, which has a supplier deal with Waitrose, overhauled its site a year ago and expanded into non-food and its food sales in 2007 were £340m, a tenth of the turnover of the offline Waitrose.

Bates also revealed Morrisons had built its market share from 11.1 in 2007 to 11.9% as a result of the rebrand campaign, which had sought to serve customers who want to shop with a ‘food specialist’ at affordable prices.