Morrisons’ festive sales flourish offers respite ahead of marketing revamp
Christmas brought some festive respite for Morrisons’ sales troubles but the pressure is on its upcoming marketing shake-up to help deliver sustainable growth following the appointment of Publicis London.
The embattled supermarket shocked the city this morning when it reported better than expected sales in its latest quarter. A focus on provenance and fresh produce in the run up to Christmas helped ease sales up 0,2 per cent in the three months to 12 January, a possible signal of things to come from the retailer’s upcoming marketing investments.
The improvement, however little it may be, will be welcomed by chief executive David Potts, who has made a raft of cost cuts and store closures since taking the helm last February. The former Tesco executive has since recruited new commercial, marketing and retail directors to help pursue what he has described as a “back to basics” approach to enticing people back into its stores.
The last of the major changes occurred last week when The Drum reported the appointment of Publicis London to help craft its advertising strategy. And if the retailer’s Christmas activity is anything to go by upcoming ads will continue to pull away from the Ant and Dec-fronted ads of old and push a more values driven interpretation of the brand.
John Ibbotson of the retail consultants, Retail Vision, remarked: "David Potts has been at the helm for a year now and even though he has delivered a better than expected Christmas Morrisons remains in dire straits.
"Morrisons, like the rest of the Big Four, is facing food deflation, changing shopper habits, not to mention the startling growth of the low cost discounters, convenience stores and the internet. It lacks the size and profitability of Tesco, has lost its price perception to ASDA and can't compete with the quality and service standards of Sainsbury’s.
"Having a high cost internet operation run by Ocado is holding it back, too. It’s fair to say that, of the Big Four, Morrisons is the least likely to pull through.”
Morrisons now accounts for 11 per cent of the UK grocery market, down on 11.3 per cent a year earlier.