What a difference a few months make.
In March, The Grocer, as well as just about every other business title, was raising serious questions about Morrisons’ strategy. Sales had been under pressure for over a year, there was still a lack of clarity over its plans for online grocery, and a number of very senior figures had left the business.
CEO Dalton Philips was copping flak from all corners - including Sir Ken Morrison, who reiterated his fears that Morrisons was alienating its core customers with its new store formats featuring misty veg and high-end wine.
Today however Philips is cutting a decidedly more confident figure as he outlined to journalists why he is convinced Morrisons is “fit for the future”. Clearly much has happened since March. The big news of course is its tie-up with Ocado that will see it start selling groceries online from January. Its convenience store rollout is continuing apace and crucially its sales are starting to turn around – up 1.2% in each of the last two Kantar market-share announcements.
These are clearly all reasons to be cheerful – but the key factor behind Philips’ new-found swagger is that its major systems programme – Evolve – is coming to a head at the end of this year and it is starting to bear fruit, finally giving Morrisons the backbone to compete properly on all these new fronts.
Morrisons will have spent £310m on the programme by the end of year – so by rights it needs to see some genuine improvements. Philips says once everything is in place it “will have leapfrogged an entire generation of tech”.
In truth this is putting it mildly; Morrisons’ systems when Philips came into the job three years ago will have given him plenty of sleepless nights. Its platform not only limited the company’s development to a total of 500 stores, it also prevented it from running certain types of promotions.
To cap it all store managers have been replenishing stock using a pen and paper system – something that Philips was not even using in his own store-manager days 20 years ago. Now all stores will do this job via tablets that are properly linked to the retailer’s new Oracle operating system.
Morrisons is hurtling into the 21st century and if it can get these systems right, then maybe it will be in a better place to truly show off the good old-fashioned retail skills it offers in the best possible light. Whether Morrisons is now fit for the future is still open to debate, but the clouds certainly seem to be clearing over Dalton’s head.
1 Readers' comment