Captain Potts steering Morrisons' ship to calmer waters

Mr Potts is attempting to return the Yorkshire retailer to its roots as a value grocer, offering quality food at low prices. He has closed unprofitable stores, cut the fat at head office with 800 job cuts, hired 5,000 extra store staff, got rid of the expensive vegetable misting machines and the latest salvo is to cut the price of 847 products.

The cuts average 20 per cent and focus on core staples such as sugar, rice, cereals​,​ nappies, bread and teabags.

The Bradford-based group is enjoying a renaissance, after revealing in March that it bounced back into profit after posting its first quarterly sales growth for four years.

The group also revealed a 0.1 per cent rise in like-for-like sales for the fourth quarter of the year, its first quarterly rise since 2012.

Clive Black, retail analyst at Shore Capital, ​expects​ Morrisons to ​announce a continuation of the improving underlying sales momentum shown in its fourth quarter​ although price deflation could see like-for-like sales brought down to zero.

“Customers are coming back. They come back when we get things right. Customers want us to be more competitive,” ​said Mr Potts.

“They want better service and less gaps on the shelves.”

A recent Which? report claimed that Morrisons has overtaken Leeds-based Asda as the cheapest main supermarket following Morrisons’ 1,000 price cuts earlier this year.

Mr Black said that ​Morrisons’ ​Price Crunch campaign is nibbling away at the differential between​ itself and the market, most notably ​the discounters.

There have also been a number of other initiatives such as store improvements​ and​ a re-launch of ​ready meals and the premium private label range.

“David Potts had much to do when he became CEO in 2015. Just over one year on and a lot of lines have been scored out albeit he has a long list to work through,” said Mr Black.

“Demonstrably putting customers first and bringing Morrisons’ personality back to life have made a difference, so creating a platform for a return to profit.”

Whereas previous management tended to throw money at the problem, Mr Potts has proved a lot more canny. Previous management wasted millions buying up a convenience estate that was in the wrong place (tertiary sites that no-one else wanted) and it was sold off by Mr Potts for £25m.

While there is scope for Morrisons to develop convenience, Mr Potts has come up with a clever deal to trial out Morrisons food in five petrol stations owned by Motor Fuel Group, the second largest independent forecourt operator in the UK.

The shops, which are all above 1,200 sq ft, will be branded as Morrisons.

If the pilot is rolled out across the estate this would give Morrisons a sizeable ready-made convenience store chain without the expense of its previous operation. It’s a no risk venture – if the trial is successful Morrisons gets access to 373 convenience stores with none of the hassle and expense of buying sites.

But perhaps the most exciting venture will be its tie-up with US giant Amazon. At the moment Amazon’s online food delivery is laughable – high prices, very few products and a £2 delivery tip when it’s supposed to be free to Prime members.

The big supermarket players have been quaking at the thought of Amazon stealing their customers by launching Amazon Fresh in the UK, but the retail giant has selected Morrisons as its partner instead of launching its own service.

The deal is expected to introduce wealthy Amazon Prime customers to Morrisons’ cut-price fresh and frozen food offering.

There is plenty for Morrisons to go for as it returns to its roots and follows up low-risk strategies in convenience and online.