Morrisons rebrands as it focuses on being ‘surprisingly good’ at pricing
Morrisons’ chief executive David Potts has claimed that its price cuts are helping it steal customers from big four rivals such as Asda, as the supermarket chain plans to rollout a new logo across its estate and future marketing activity.
A recent Which study claimed Morrions was now the cheapest big four supermarket, ahead of Asda. And Potts said Morrisons’ latest results had been boosted by attracting new customers, which he attributed to price cuts of an average of 3%, for the year to 31 January 2016.
It also posted a pre-tax profit of £217m for the period compared to a £792m loss the previous year. Like-for-like sales, meanwhile, were down 2% – a less painful decline than the previous 5.9% fall.
Potts told Marketing Week at a press briefing: “Our customer count is up by 3.8% for the year so we must be getting them from somewhere.
“We want to be surprisingly good when it comes to pricing, that’s a good place to be. People have noticed we are becoming more competitive. The in bound social media and letters we’re receiving in praise of these price cuts shows just that.”
Morrisons expects profits to rise by up to an additional £100m for the new financial year. And Potts said the supermarket would be boosted by improvements made across its estate.
As part of its Fresh Look programme, Morrisons will revamp all of its stores by the end of 2019. This will include adding its new tree logo (pictured), which was revealed late last year, to all of its stores.
Potts, however, insisted the move didn’t amount to a rebrand and was more of a device to improve its stores.
“The new logo is more confident and the tree feels more British, the leaves are in growth. Each refit will have one,” Potts added. “But this isn’t a big rebrand, we are too focused on getting the stores right to worry too much about that right now. It’s just a refresh for the stores.”
However, Marketing Week understands that the new logo isn’t store-only and will also be included in the upcoming Morrisons’ Easter ads created by new agency Publicis London. The logo is also in the latest press release from Morrisons for the results.
Last month, Morrisons signed a deal with online retail giant Amazon, offering its Amazon Prime Now and Amazon Pantry customers the opportunity to buy ambient, fresh and frozen products from the Bradford-based grocer. As part of the deal, Morrisons will give up control of the prices that Amazon sells its products at.
Potts said the deal would help the retailer to grow its brand awareness and that he wasn’t worried about losing control.
He explained: “It’s very early days and we have to see how it progresses but it gives exposure to the Morrisons brand; that’s what Amazon offers above all else. You could say that [we’re losing control of prices] but we have 3.8% share of the online market, Tesco has 46% – so it is clear why we’re doing this.”
A year on…
And Potts, who took up the role of chief executive of Morrisons almost a year ago, told Marketing Week he had no regrets and was pleased with how things are progressing.
He concluded: “I don’t have any regrets. Maybe that I’ve put a bit of weight on but that’s because of all the pies!
“It’s been a big team effort from the people in the stores to the manufacturing and head office. Everybody, so far, has moved forward with great passion.”