Morrisons: Past is key to future

THERE IS a contradiction at the core of the latest financial results posted by Bradford-based Morrisons – it has sold its chain of 140 M local stores, and announced the closure of 11 loss-making supermarkets, at a time when shoppers, by the firm’s own admission, want greater convenience because of changing lifestyle patterns.

Yet the greater necessity remains the need to restore the reputation, and financial fortunes, of this Yorkshire institution in the wake of the disastrous Dalton Philips era. Morrisons continues to pay a heavy price for its reluctance to embrace internet shopping – and then the flawed decision to wait until its high street rivals had stolen a march before branching out into convenience stores with a flawed business plan.

The consequence? Morrisons continuing to be saddled with unprofitable premises, leased at exorbitant prices, whilst the new leadership team, headed by chairman Andrew Higginson and chief executive David Potts, try and restore staff pride at a time when competition within the supermarket sector has never been more intense thanks to the discount retailers – one of the main factors behind a 47 per cent drop in half-year profits to £126m as turnover fell five per cent to £8.1bn.

Given this, Morrisons has no alternative other than to focus on core shops – the bread and butter of its business. Market share has never been more important and there are welcome early signs that the new ‘back to basics’ management regime is making a difference with a renewed focus on customer service and front line staff, even if this has been the expenses of several hundred job losses at its headquarters.

Even more encouraging has been the desire of Mr Potts to embrace the priceless principles of the firm’s founding father Sir Ken Morrison – the life president has accompanied the new chief executive on discreet visits to stores to look at the products on sale and observe standards of service at first hand. Long may this continue. For, in many respects, the firm’s illustrious past holds the key to a successful future – something the aforementioned Mr Philips failed to recognise, and with ruinous consequences for all those who have lost their jobs as a result of his disastrous decision-making.