Greg Wright: Will Morrisons see clearly now the mist has gone?

TO shamelessly rip-off a much-loved song, Morrisons’ shareholders must be hoping management can see clearly now the mist has gone.

The mist in question hung over Morrisons’ fresh produce, and it showed that Dalton Philips never really understood what made customers tick.

Yesterday, Mr Philips clocked off for the last time as Morrisons’ chief executive, and the misting machines he introduced have gone out of the door with him.

Mr Philips is undoubtedly an honourable, capable man who faced colossal challenges during his turbulent five years in the Morrisons’ hot seat.

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    Discounters were constantly chipping away at Morrisons’ market share, and the critical noises from former Morrisons top brass had become deafening, with even Sir Ken Morrison describing the company’s strategy as “bull****” in the very public setting of the AGM.

    Roger Owen, the company’s former property director, caused ripples around the corporate world when he told The Yorkshire Post last year that Morrisons resembled a “supertanker heading towards an iceberg”.

    Looking back. it’s amazing Mr Philips survived for so long, and he showed strength of character in sticking to his guns in the face of such opposition.

    Mr Philips deserves credit for setting up an online operation, and establishing a network of convenience stores to reflect the revolutionary changes in the grocery market. But it was a case of too little, too late, according to his detractors. The controversial misting machines, which were introduced to keep produce fresh and create a sense of “theatre”, were blamed for alienating core shoppers, who just wanted to see the shelves stacked with goods they wanted to buy.

    There is tremendous affection for the Morrisons brand in Yorkshire, and shoppers will flood back if they just get the basics right. Customers aren’t just leaving Morrisons because an Aldi or Lidl has appeared down the road.

    For example, my colleague Tom Richmond stopped using his local Morrisons nearly a year ago when it proved virtually impossible to buy skimmed milk on a Saturday mid-morning. As Tom observed, lapsed customers will return if the company places a premium on stocking basic groceries - just the sort of goods that were on offer when Morrisons was founded on a market stall all those years ago.

    There may be a long road ahead. Following the news of Mr Philips’ exit and the departure of chairman Sir Ian Gibson, Roger Owen said that the non-executive directors had demonstrated “they are not capable of running a school tuck shop”.

    Andy Higginson, the new chairman, has said that the firm is making good progress with the search for a CEO, although he warned that it will take three to five years to restore Morrisons to full health.

    This revival will be worth waiting for. In late 2013, to widespread derision, I chose Morrisons as my share tip for the year ahead. With hindsight, I was 12 months too early. 2014 was a torrid year. Morrisons suffered from plunging sales and profits, and the continued threat from the discounters. But, to quote the respected analyst Clive Black, Morrisons is now in the process of getting a grip on things.

    As Mr Higginson observed, the solution really is as old as the hills. He said it’s all about “execution and delivering..trying to encourage more customers to come to your stores”. Absolutely.

    I’ve always believed that Morrisons should never have ventured beyond its Northern heartlands. A more compact business, with a powerful regional identity, would have probably been better equipped to cope with the years of economic turmoil. Booths is a classic example of a Northern retailer which has prospered by staying true to its roots.

    For Morrisons, the most pressing need is to surpass the City’s expectations.

    Now, surely, is the time to hire a no-nonsense retailer as CEO who knows the workings of the shop floor.