Bernard Ginns: Sir Ken keeps his counsel as Morrisons drops more sales

One is that the Bradford-based retailer is moving in the right direction with its modernising agenda.

The falling sales and loss of market share are just temporary blips as the supermarket giant repositions itself for the future.

The other is that Morrisons has lost its way, has deep underlying problems and the sooner it rights itself, the better.

But whichever aisle you find yourself in, the checkout rings the same: a 2.5 per cent fall in like-for-like sales in the six weeks to December 30.

The pace of decline is quickening: sales at stores open for more than a year slipped by 2.1 per cent in the third quarter.

Dalton Philips, chief executive, promised the 482-store group would focus on doing a better job of telling customers how its products and service beat those of other supermarkets, in particular by “shouting about” its 5,000-plus butchers, bakers and fishmongers.

The Irishman is researching the possibility of an online food offer and said he will say more when the group publishes full year results in March.

“We’re not too late to the party, it’s still only five per cent of the market.

“So in terms of the long term we haven’t lost out,” he said.

“This is a market where for 12 years people haven’t made money and we want to do the right thing both for our shareholders and our customers.”

That may be so, but retail moves fast and it is a brave man who is prepared to sit by and watch while others make headway and steal a march.

Clive Black, retail analyst at Shore Capital, is a persistent critic. He pointed out that total sales for the most recent period fell 0.9 per cent, “a clearly very disappointing figure for its management and investors alike”.

Mr Black said: “We have believed for some time now that the business has lost touch with some of its core customers, especially in its trading heartlands, but not attracted compensating new ones with its evolving proposition.

“Additionally, the business... has not been positioned to harvest the few growth areas of the grocery trade at present through convenience and online.”

He also questioned how much the consumer really cares about the group’s vertical integration and said Morrisons has to demonstrate – rather than talk – about its unique selling points in fresh foods in-store.

“We are worried that Morrisons is not playing the right tune for the market and that it may take some time for the tuning fork to work,” he added.

What does Sir Ken make of all this? City Editor Ros Snowdon spoke to the retail veteran yesterday, but the man who transformed his parents’ small supermarket business into a UK retail giant was not in an expansive mood.

Asked if Morrisons has lost its value credentials, he said: “I don’t think so.” Asked if he thought the top management are doing a good job, he said: “There are a lot of good core staff at Morrisons.”

Asked if he is happy with the management’s plans to introduce online and open more convenience stores, he said: “I’ve been retired for five years and I’ve no part in any discussion on policy.”

And asked if he is happy with the general direction, the 81-year-old said: “I’m just a retired pensioner.”

The same man stood up at June’s annual general meeting and warned the executive team and board against “neglecting the core business”.

After the AGM, he told me: “I’m just anxious that the company should prosper.

“There are a lot of people who depend on it for a living and seeing it growing and prospering is really what it’s all about.”

Morrisons is Yorkshire’s largest plc. It is one of the region’s largest employers. We want it to do well. But you have to wonder about the strategy and the big turnover of senior staff must be a concern. Big businesses like Morrisons need a degree of stability.

Mr Philips insisted he had the full support of shareholders, but his backside is edging closer to the bacon slicer. Like football, retail is a results game.

I would like to wish readers a belated happy new year and all the best for 2013.

Some commentators are describing 2013 as ‘Groundhog Year’ in a nod to the Bill Murray comedy about the TV newsman caught in a time loop.

You can see why. As with 2012, consumers will continue to face the squeeze, small businesses will struggle to access credit and company directors will err on the side of caution when it comes to investment decisions.

But I can confidently predict that 2013 will be full of surprises (!) and I can guarantee that the best businesses will continue to flourish by being excellent at that very important thing: looking after the customer.