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Online Morrisons

Morrisons to reveal online strategy? Rumours circulate that announcement is imminent

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By Jennifer Faull, Deputy Editor

March 10, 2013 | 2 min read

Analysts are expecting an announcement regarding Morrisons’ online plans this week, as the supermarket comes under increasing pressure to boost its sales.

According to reports, Morrisons chief, Dalton Phillips, could start by offering customers a “click-and-collect” service at stores.

Deutsche Bank analyst Sally Ronald told the Scotsman: “With the core business under pressure, the most benign option for the share price would be a defensive strategy offering click-and-collect from stores on a trial regional basis.

“A more aggressive approach committing to a fresh model akin to US FreshDirect – potentially leveraged from the new distribution centre in west London currently billed as convenience-store fulfilment – would differentiate Morrisons strategically.

“However, any prospect of significant capital expenditure and start-up losses could pressure the valuation.”

Meanwhile, James Grzinic, an analyst at house broker Jefferies, said: “We expect Morrisons to confirm a focus both on improving the performance of its core estate and on addressing its lack of exposure to convenience and online. This could be accompanied by reduced new space targets. The greater urgency in tackling its lack of convenience offering, with the original target for 70 M-locals by January 2014 already delivered following the acquisition of 56 high-street locations in recent weeks, is evident.

“Food online expansion may be more tentative, given less straightforward economics.”

Despite a brand endorsement deal which has seen well-known TV duo Ant and Dec appear in its advertising campaigns, the latest figures show Morrisons post sales figure was down 1.3 per cent in the 12 weeks ending 17 February.

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