The first deliveries are available in Warwickshire and West Yorkshire, before London and South Yorkshire go live in mid-2014 and the service expands to the north west of England before the end of the year. The launch is accompanied by a local marketing push, with press, radio and out-of-home ads.
A Morrisons spokesperson says: “[The ads] “bring to life that our service offers a distinctively Morrisons online experience. We’ve combined our expertise in fresh food and craft skills with the best technology and logistics.”
Morrisons has partnered with Ocado for its online venture and is hoping a focus on fresh food and customer service will help differentiate it from more established rivals and persuade shoppers to switch to its offering.
Morrisons cited its lack of online offering as part of the reason why it had such a distastrous Christmas. Sales at the supermarket were down 5.6 per cent in the 6 weeks to Christmas and it was forced to issue a profit warning.
By comparison, Tesco saw sales fall by 2.4 per cent while Sainsbury’s boasted growth of 0.2 per cent. Both saw their performances boosted by online, with Tesco’s online sales up 14 per cent and Sainsbury’s up 10 per cent.
The big four supermarkets are all facing growing competition as customers increasingly head to discounters and premium grocers. Both Aldi and Lidl are expected to have seen double-digit sales increases, while Waitrose posted a 3.1 per cent rise and food sales at Marks & Spencer were up 1.6%.
Morrisons is at a disadvantage because it is under-represented in two areas – online and convenience – that are seeing the biggest growth as grocery shopping becomes increasingly multi-channel. It also doesn’t have its own loyalty programme, a factor that hit it particularly badly this year when its rivals turned to vouchering to boost sales.
Morrisons is now also planning to launch a loyalty programme, with trials expected to start in the next couple of months. However, Shore Capital analyst Clive Black warns that these latest moves may not be enough, with the supermarket chain needing to rethink its whole brand, particularly its focus on fresh food.
“We are of the view that Morrison’s is under-performing because of the fundamental issues with its brand, stores and offer and not these other matters, to think otherwise is dangerous to our minds. Indeed, we believe that the Fresh Formats approach did much to ostracise core customers of Morrison’s but not attract new ones.”