John Ibbotson / 9th March 2017
Morrisons most resent figures show the turnaround planed by David Potts is really working. The retailer is starting to look in good shape. Here are my thoughts on the results:
“Morrisons has been transformed over the past two years from a rudderless ship to a modern-day grocer with a growing sense of direction.
“It has left Asda in the dust and is looking in a similar state of health to the resurgent Tesco.
“Morrisons has regained shoppers’ trust and, crucially, is luring them back from the discounters. Its’ shareholders must be thinking that David Potts has got the Midas touch.
“In reality, there was no magic involved. Potts has simply returned Morrisons to its roots of low prices, good value and fresh food. It’s a back-to-basics approach that has worked impeccably.
“It’s encouraging that Potts accepts that the Morrisons turnaround has only just begun, as there is still a very long way to go.
“It’s still the smallest of the Big Four, lacks scale and its market share is a fraction of that of Tesco. And the discounters, Aldi and Lidl, remain a genuine threat.
“There’s also the small matter of food inflation, although the falling Pound may hurt Morrisons less than its rivals, as a high proportion of its food is produced in the UK.
“However, cost cutting and the faster supply chain have raised efficiency significantly, while the “capital light” wholesale deal with Amazon is a low risk way to make greater inroads into the online grocery market.
“The deal to install Amazon lockers in 400 stores will also be a particularly cost-effective way to increase customer traffic flow.
“Potts has a plan and for now it appears to be working seamlessly.”
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