Morrisons seems to have developed an uncanny read of the national mood since lockdown. Those poor, hard-working, brave nurses were the inspired recipients of a 10% discount at Morrisons last April. And with sympathy for nurses growing further due to the government’s derisory 1% pay rise, it followed up at its results this week by extending the discount to the end of the year.
It’s a good example of how Morrisons has focused on the bigger picture and the wider community throughout the pandemic. Other examples have included doorstep delivery boxes, like the new Mother’s Day Breakfast in Bed box, or those for shielding but non-internet-savvy shoppers; its pioneering move to offer small suppliers immediate payment; and the recent £10 an hour pay deal (on top of a tripling in the average colleague bonus and an increase in the staff discount).
As a result, brand warmth and net promoter scores have grown steadily for Morrisons, to outperform its big four rivals, according to YouGov data.
Another example this week is the presentation of the halving of profits, described by CEO David Potts as “a badge of honour”. True, profits would actually have risen if Morrisons had not handed back £230m in business rates relief (quickly following Tesco’s lead) but his comments about “true value” and “true worth” are consistent with his focus in the earlier turnaround on a strategy that benefits all stakeholders – in stark contrast with the previous regime which, in the midst of a price war, was actively targeting £1bn in profits.
Certainly shareholders won’t have much to complain about, despite the fall in profits, with a 27% increase in the dividend paid out, and the prospect, as Potts put it, that “as society tastes freedom and we take those first steps towards it, all of our Covid costs, all the debt and cash outflow will at some point this year turn positive”. Morrisons is even opening new stores: another four are planned this year. Like Potts, none are big and brash (they range from 15,000-27,000 sq ft), but in their own quiet way they’re delivering, quite literally, being used not just to shop but “as a Trojan horse for new sales around online”.
No comments yet