Morrisons defiant over relaunch
Brand director Belinda Youngs is overseeing the relaunch of 11,000 products in an effort to increase sales at the Bradford-based supermarket giant, which has been losing market share to rivals.
She told the Yorkshire Post: “We are up significantly in categories and products we have relaunched. We are up in line with our business case. There are some highs and lows in that.”
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Hide AdThe relaunches total 3,500 since the overhaul began in October 2011. Ms Youngs said Morrisons is on target to complete the process by October 2013.
But she admitted there had been some teething problems as Morrisons tries to widen its appeal to shoppers across the UK.
She said the big challenge “is to make sure that we create a range that has that broad offer for our customers. Then we adjust it, differentiate it by each market and that’s a challenge for us.
“Until we have full technical capability some of that is still quite manual. That will really create the sweet spot of relevance for our customers, having the right range in the right store in every store – that’s the key priority.”
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Hide AdMs Youngs added: “The key is to make sure that we differentiate that range by demography and geography and put a different range in St Albans to a range we might put in Castleford.”
Leading retail analyst Clive Black, of Shore Capital, told the Yorkshire Post that the retailer’s offering has been changed too radically in the working class towns of South Yorkshire, West Yorkshire and East Lancashire.
He said: “They probably have to slow down the rate of change and do some more evolutionary rather than revolutionary. They have to keep in touch with their customers.” Former chairman Sir Ken Morrison raised concerns at this year’s AGM about the direction of the company.
Ms Youngs acknowledged that Morrisons is moving very quickly and has to deal with the challenge of minimising disruption to customers by researching what is working and then “having the agility and flexibility to make the changes and course correct at the same time”.
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Hide AdShe added: “It’s just managing that complexity. It’s going well.”
Ms Youngs pointed to market research into Morrisons’ own brand, which shows a progressive rise in customer satisfaction levels over the last five months.
She said: “That’s often a leading indicator of sales growth as well. The more we satisfy our customers, the more we will help grow our business.”
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Hide AdMorrisons launched its M Kitchen ready meals range in October 2011 with input from suppliers and chefs including Aldo Zilli.
The group followed this in January with its new value range M Savers.
Morrisons is also revamping its fresh food offering, featuring its in-store bakers, butchers and fishmongers.
Own-label currently represents around half of Morrisons’ grocery sales.
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Hide AdMr Black of Shore Capital said efforts to improve the range will enhance gross margins and provide a stronger proposition for customers.
“At the moment, it’s a work in progress.
“There have been some steps forward but some steps back,” he added.
He said the M Kitchen range “hit the wrong note at the wrong time” with people in poorer parts of the country counting their pennies.
But Ms Youngs said: “We have to make sure we have a broad range. Historically, Morrisons has been under-developed in the market at the bottom end and under-developed at the top end.”