Morrisons shows signs of life as brand overhaul and marketing push maintain sales growth
A 0.7 per cent rise in like-for-like quarterly sales signals early signs of recovery for embattled supermarket Morrisons, though the initial successes of a revamped marketing strategy and aggressive pricing have a long way to go yet to stabilise the business
In addition, like-for-like transactions increased by 3.1 per cent in the 13 weeks to 1 May, yet deflation remained an issue at 2.6 per cent.
This maintained growth momentum first registered over Christmas and indicates that David Potts’ turnaround plan may be starting to bear fruit following a period of 16 successive quarters when total sales fell 1.8 per cent on the back of increased competition, store closures and the phasing out of smaller M convenience stores.
Most recently, it embarked on a major rebrand as it rolled out its 'Fresh Look' store format and branding, including the new tree-themed logo which has also made its way on to the retailer's marketing efforts. At the time, Potts' said it underpinned an opportunity to "increase popularity and brand."
Commenting on the latest set of results, Potts said today (5 May): “We are encouraged by progress across our six priorities. There is still much to do and our colleagues are working very hard to improve the shopping trip and save customers every penny we can.”
In recent months Potts has slashed management head counts in order to boost frontline staff and has continued a programme of store closures. It also committed to a new marketing strategy following the appointment of Publicis London at the beginning of the year.
With the appointment of marketing boss Andy Atkinson also still fresh, its advertising strategy remains in a state of flux as it tries to show itself as both a value retailer and highlight its 'made in store' proposition.
The ‘Price Crunch’ campaign - which was extended earlier this week - is now running in tandem with a brand-led campaign featuring a family sitting down to a roast dinner.
While 'Price Crunch' seems to be going some way to boosting sales it remains to be seen if the latter can recalibrate the brand among consumers.
However, Potts said today that if "Price Crunch as a mechanic work’s we’ll do it more". Earlier, he also talked up the benefits it's seen from trying to remain competitive on price whilst not "obsessing" over what other retailers - namely the discounters - are doing.
"We should obsess a little less about other retailers prices," he said. "We’ve worked hard on Morrisons price list …it is a journey and we’re more competitive and my measure [of how it's performing versus other retailers] is if customers think they’re getting a better shopping trip."
However, in its broader marketing customers should expect to see the wider 'Morrisons Makes It' positioning used more extensively.
Overall, he said, customer satisfaction is up over last year although declined to give any figures.
Additional reporting by Jen Faull.