Morrisons, buoyed by profit boost, pushes forward with roll out of Fresh brand across 100 stores
Morrisons has said it will roll out its 'Fresh Look' store format and branding - including the new tree-themed logo - across 100 stores this year after reporting a respectable set of figures for the year to January 31.
Speaking to journalists at an event in London today (10 March), chief executive David Potts insisted it wasn't to be seen as a rebrand but that customers have repsonded well in the six stores where the fresh look has been trialled.
“We’re not rebranding the company, we’ve got other priorities. But customers like it. It’s being described as an expression of confidence. The tree [logo] is considered British and the leaves are in growth. If you see it in the side of stores it looks knock out," he said.
Morrisons first revealed the Fresh logo last September, marking the first time the logo had been tampered with in nearly a decade. The font has been modernised, moving away from the geometric style, with the ‘i’ used to form the trunk of a tree with gold leaves. The addition of ‘since 1899’ also harks back to its market orgins.
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It will be introduced with each store upgrade Morrisons completes.
"There is an affection for Morrisons," added Potts. "There’s an opportunity to increase popularity and brand."
It comes as the grocer noted a pre-tax profit of £217m in the 12 months to January 31. It came as a boost for the supermarket, which the year previous endured a £792m loss as it wrote off a number of unprofitable stores and the M Local chain.
However, challenges in competing with the likes of Aldi and Lidl remain evident as it noted underlying profit before tax was down to £242m for the same period versus £345m the year before.
While sales were down two per cent it is a marked improvement from the near 6 per cent fall in 2014.
Potts said that it has now “started on a journey” to turning around the business.
“Our listening programme is informing and shaping the six priorities that are now driving the improvements that customers are noticing,” he said.
Potts will be enthusiastic about the year ahead, having just inked a deal with Amazon to boost its fledgling online delivery businesses. Potts batted away the suggestion that it could dilute the brand, suggesting that it might see the oppostie in more Southern parts of the country where it has historially stuggled to gain a foothold.
"Exposure for our brand is a good thing," If you take example in London, where we’ve got 1.6 per cent. of the market, Amazon is strong. So, I don’t have a concern. We've gone into the relationship with our eyes open."
A new brand campaign is also anticipated in the coming months after the supermarket shifted its £73m advertising account to Publicis London.
“What makes us truly unique as food maker and shopkeeper is the personality and dedication of our thousands of colleagues. I am confident these strengths will help us fix, rebuild and grow Morrisons," said Potts.
During the coming year Morrisons expects to realise the remainder of its £1bn three-year cost savings target, but added the “turnaround will take time and will continue to require sustained investment in the proposition.”
“We also expect to exceed our three-year targets for £600m operating working capital improvement and £1bn property disposal proceeds,” it added.
However, John Ibbotson, consulting partner at management consultancy Retail Vision reminded that for all the hype, Morrisons’ sales have still slumped and earnings are being inflated by asset sales, “and there aren’t many assets left.”
"The discounters have gone nowhere, food deflation is entrenched and shopping habits are almost unrecognisable from a decade ago,” he said. "Meanwhile, the elephant in the room Asda, which overlaps the most with Morrisons in the north and [is] bankrolled by Walmart and implementing Project Renewal, will become a superstore with discounter prices and is set to pose the biggest threat to Morrisons in the months and years ahead.
"Morrisons may be back in the FTSE 100 and it may have teamed up with Amazon, but many will argue its core business is still mutton dressed as lamb."