Morrisons says customers hold the key to its revival

Picture: Marie Caley

Picture: Marie Caley

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MORRISONS​’ new boss David Potts​ said customers “hold the keys to the kingdom” when it comes to deciding what direction the embattled group should take following a further fall in sales.

​Mr Potts has visited 90 stores in the seven weeks since he joined the Bradford-based firm and said he will be guided by what customers and colleagues say the supermarket chain should be doing.

“I honestly believe if we listen very hard to customers and our own colleagues we won’t go far wrong,” he said.

​“They already hold the keys to the kingdom.”

He was speaking as the group announced a 2.9 per cent fall in like-for-like sales​​ in the 13 weeks to May 3​.

Th​is was in line with​ analysts’ forecasts of a decline of about ​three​ per​ ​cent and ​follows ​a fall of 2.6 per​ ​cent in the fourth quarter of ​last year.

Analysts noted comparative numbers were very weak as Morrisons’ like-for-like sales had slumped 7.1 per​ ​cent in the first quarter of 2014-15.

​​Ex-Tesco executive ​Mr ​Potts has ​been quick to make changes, axing the majority of the management team he inherited a week after joining.

He has also announced plans to cut head office staff by 720, at a cost of ​£​30​m to ​£40​m, while adding 5,000 shop floor staff to improve customer service.

​He has made himself popular with customers by bringing back​ staffed express checkouts, getting rid of the computerised queue management system and quietly removing the controversial misting machines, which were seen as a sign of just how profligate the previous management team had become.​

​Mr Potts’ moves to take the store back to basics have won the approval of the founder’s son and former boss Sir Ken Morrison.

He said that the drive to “rediscover Morrisons’ identity” has been welcomed by Sir Ken.

“I am especially fortunate to still be able to call on the wisdom and experience of man with such stature in the industry,” he said of his predecessor.

Analyst Clive Black at Shore capital said: “Since the start of the calendar year Morrisons has embarked upon substantial change aimed at improving its customers shopping trip.

“It is clearly still very early days in Mr. Potts’ tenure but we sense he is bringing a deep rooted and fundamental change to Morrisons that is for the better. We make this assertion not because Dalton Philips was ineffectual but because in this market the business needs an experienced leader. In this respect we demonstrably believe that Mr Potts has hit the ground running.”

Morrisons said it ​expects underlying ​annual ​​pre-tax ​profit ​will be higher in the second half than the first.

Finance director Trevor Strain ​said the company​ is happy with analysts’ average full-year forecast of ​£​356​m. The consensus ha​s fallen from ​£​387​m when Morrisons reported 2014-15 results in March.

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