Morrisons’ directors north and south are confident of winning at all their stores by listening and adapting to local customers, as they explain to Ronan Hegarty
This week Morrisons opened four newly converted Safeway stores. When the ribbons were cut at its stores in Camden, Glasgow, Clevedon and Rubery near Birmingham on Thursday, Morrisons celebrated one of the biggest milestones in the history of the company: the completion of its mammoth conversion programme, some 219 stores in 17 months.
But for Mark Harrison and Chris Taylor, Morrisons’ store directors for the north and south respectively, the hard work is only just getting under way.
The biggest task they face, say industry commentators, is adapting an inherently northern brand of retailing to create a formula that works in the south.
As one senior retail analyst says: “I believe that Morrisons has made progress with its advertising and its stores are getting better. However, I don’t think it is there yet. Many shoppers in the south loved what they could find in Safeway and in these areas Morrisons needs to deliver much more of a hybrid.”
Rivals, too, insist that Safeway shoppers have deserted the business.
Sainsbury chief executive Justin King told The Grocer recently: “We think there has been a lot of churn as customers come back into the market and say, ‘Where is best for me to shop?’ Our focus on fresh food and range made us the best place to come and we have grabbed our fair share of that.”
The latest set of results from Morrisons suggest, however, that it is in its converted Safeways that it is having the most success.
While there is little comfort to be drawn from a pre-tax loss of £73.7m, its trading update for the 12 weeks to October 16 showed like-for-likes at converted stores were up 11%; a stark contrast to the core estate where sales were down 5.2%.
Research carried out by Harris Interactive Europe exclusively for The Grocer found little evidence of a mass exodus by Safeway shoppers.
Only 26% of shoppers in London and 21% of those in the rest of the south east are doing less shopping in their local Safeway/Morrisons store than a year ago.
In London 26% of those surveyed are actually doing more shopping while the figure for the south east is 29%.
Just 10% of shoppers in the south east feel that the product range has got worse since Morrisons took over Safeway.
Harrison insists the arguments that Morrisons has found difficulty meeting the needs of Safeway shoppers just don’t stand up to scrutiny.
As the conversion process has gone on, Morrisons has built up a clear picture of what its shoppers want, he says.
“We understand that our shoppers are looking for different things in different parts of the country and are not trying to force a one-size-fits-all format on anyone.
“As well as all the data we had from Safeway, there is a certain amount of flexibility. Store managers can ask for what they want to sell. We have revisited our conversion stores every four weeks since they opened and have been able to adjust the range accordingly.”
Taylor is confident that his job will be no different to that of his colleague in the north and says that the retailer is getting the right range and offer to suit customers across the country.
He says: “It wouldn’t make sense to simply scrap what you do well and come up with something new.
“We are very confident in our basic store footprint and that is not going to change. When we open a converted store we are confident that at least 80% of the range is exactly as we would want. Obviously as the store beds in there will be finetuning to get everything right. I have every confidence this is already happening.”
Harrison claims the range now on offer is much better than it was under either Morrisons or Safeway - having incorporated the best of both. Morrisons has taken the fledging Safeway The Best range and built it up to 250 lines as well as embracing the Safeway Eat Smart health range, for instance, while Morrisons’ Market Street fresh food concept is now a key feature of former Safeways.
The two executives also point to the fact that Morrisons has increased its local sourcing initiatives including stocking local sausages, cream and cakes in Dorset and cheese, eggs and meat in Welsh stores. The store at Stamford Hill in Stoke Newington now stocks oils specifically to cater for a large Jewish community.
Taylor, who previously spent 28 years with Safeway, says Morrisons’ selling culture has helped reinvigorate the workforce as well as helping to improve the offer.
He argues: “Store managers can convince us that they need extra product lines and we will look into it.
“But it is always led by what the customer wants and if we can fit new lines in and give space to products without taking away from our core offer, we’ll do it. At Safeway these decisions were too often driven by suppliers and not customers.”
Nevertheless, as it moves into new regions, Morrisons has a battle on its hands to change customers’ perceptions - a task made harder by an adverse press.
To back what’s happening in stores, Morrisons has launched a major advertising blitz, with plenty of local leafleting and regional advertising featuring the voice of gritty Sheffield actor Sean Bean, all designed to raise awareness of the products on offer and reinforcing the retailer’s famous (in the north at least) ‘More Reasons’ slogan.
But Harrison says the business is ready to let stores speak for themselves: “When you open a new store in an area where you haven’t been established before, people don’t know what to expect.
“It doesn’t matter if this is in the south or the north. Even in the north if we open a store in a new town we have to work hard to attract new customers to do their shopping there.”
Taylor agrees: “Every store is a new store; there are no different challenges in different parts of the country. We are currently seeing our strongest growth in Kent, an area where we had no presence whatsoever. When a new store opens people will go and try it so it is vital that we hit the ground running.”
The south is not the only new territory for Morrisons, says Harrison, who equates the job Taylor has in the south with his task of dealing with the stores in Scotland where Safeway was a strong player before it was taken over.
“We have being doing exceptionally well in Scotland, with the key being our ability to build confidence in the brand. We have opened five new-build stores in Scotland and each one has been better than the previous opening,” he explains.
Harrison says the key to Morrisons delivering success is that all its stores have to deliver. He says: “From now on our heartland is no longer the north of England but right across the country. We have one group of 360 core stores,” he says.
“I am confident that our standards are now good and given the chance to go about our business without all these distractions, I’m sure we can be great.”
What this also means is that Morrisons can make no more excuses. With Safeway a thing of the past, the ball is now firmly in Morrisons’ court.
Thumbs up?
>>what shoppers think
What shoppers think of the converted Safeway stores, in terms of range, quality, price and service, both nationally and in the north and the south
How much shopping do you do in your Safeway/Morrisons compared to last year?
NationalYorkshire South East
More24%25%29%
Less24%12%21%
Same52%63%50%
How has Safeway changed since being taken over by Morrisons? (%)
Range
NationalYorkshire South East
Better25%31%22%
Worse11%8%10%
Same26%33%25%
Not sure38%28%43%
Quality
NationalYorkshire South East
Better 18% 23% 19%
Worse 14% 8% 11%
Same 31% 41% 27%
Not sure 37% 28% 43%
Service
National Yorkshire South East
Better 15% 18% 16%
Worse 11% 9% 8%
Same 36% 45% 34%
Not sure 38% 28% 42%
Price
National Yorkshire South East
Better 31% 22% 29%
Worse 7% 14% 4%
Same 23% 34% 22%
Not sure 39% 30% 45%
Availability
National Yorkshire South East
Better 19% 22% 19%
Worse 10% 8% 10%
Same 31% 37% 27%
Not sure 40% 33% 44%
Research conducted by Harris Interactive’s Harris Poll Global Omnibus among a nationally representative sample of GB main grocery shoppers, October 20-24 2005. Contact: Caroline North 0208 263 5246 cnorth@harrisinteractive.com
This week Morrisons opened four newly converted Safeway stores. When the ribbons were cut at its stores in Camden, Glasgow, Clevedon and Rubery near Birmingham on Thursday, Morrisons celebrated one of the biggest milestones in the history of the company: the completion of its mammoth conversion programme, some 219 stores in 17 months.
But for Mark Harrison and Chris Taylor, Morrisons’ store directors for the north and south respectively, the hard work is only just getting under way.
The biggest task they face, say industry commentators, is adapting an inherently northern brand of retailing to create a formula that works in the south.
As one senior retail analyst says: “I believe that Morrisons has made progress with its advertising and its stores are getting better. However, I don’t think it is there yet. Many shoppers in the south loved what they could find in Safeway and in these areas Morrisons needs to deliver much more of a hybrid.”
Rivals, too, insist that Safeway shoppers have deserted the business.
Sainsbury chief executive Justin King told The Grocer recently: “We think there has been a lot of churn as customers come back into the market and say, ‘Where is best for me to shop?’ Our focus on fresh food and range made us the best place to come and we have grabbed our fair share of that.”
The latest set of results from Morrisons suggest, however, that it is in its converted Safeways that it is having the most success.
While there is little comfort to be drawn from a pre-tax loss of £73.7m, its trading update for the 12 weeks to October 16 showed like-for-likes at converted stores were up 11%; a stark contrast to the core estate where sales were down 5.2%.
Research carried out by Harris Interactive Europe exclusively for The Grocer found little evidence of a mass exodus by Safeway shoppers.
Only 26% of shoppers in London and 21% of those in the rest of the south east are doing less shopping in their local Safeway/Morrisons store than a year ago.
In London 26% of those surveyed are actually doing more shopping while the figure for the south east is 29%.
Just 10% of shoppers in the south east feel that the product range has got worse since Morrisons took over Safeway.
Harrison insists the arguments that Morrisons has found difficulty meeting the needs of Safeway shoppers just don’t stand up to scrutiny.
As the conversion process has gone on, Morrisons has built up a clear picture of what its shoppers want, he says.
“We understand that our shoppers are looking for different things in different parts of the country and are not trying to force a one-size-fits-all format on anyone.
“As well as all the data we had from Safeway, there is a certain amount of flexibility. Store managers can ask for what they want to sell. We have revisited our conversion stores every four weeks since they opened and have been able to adjust the range accordingly.”
Taylor is confident that his job will be no different to that of his colleague in the north and says that the retailer is getting the right range and offer to suit customers across the country.
He says: “It wouldn’t make sense to simply scrap what you do well and come up with something new.
“We are very confident in our basic store footprint and that is not going to change. When we open a converted store we are confident that at least 80% of the range is exactly as we would want. Obviously as the store beds in there will be finetuning to get everything right. I have every confidence this is already happening.”
Harrison claims the range now on offer is much better than it was under either Morrisons or Safeway - having incorporated the best of both. Morrisons has taken the fledging Safeway The Best range and built it up to 250 lines as well as embracing the Safeway Eat Smart health range, for instance, while Morrisons’ Market Street fresh food concept is now a key feature of former Safeways.
The two executives also point to the fact that Morrisons has increased its local sourcing initiatives including stocking local sausages, cream and cakes in Dorset and cheese, eggs and meat in Welsh stores. The store at Stamford Hill in Stoke Newington now stocks oils specifically to cater for a large Jewish community.
Taylor, who previously spent 28 years with Safeway, says Morrisons’ selling culture has helped reinvigorate the workforce as well as helping to improve the offer.
He argues: “Store managers can convince us that they need extra product lines and we will look into it.
“But it is always led by what the customer wants and if we can fit new lines in and give space to products without taking away from our core offer, we’ll do it. At Safeway these decisions were too often driven by suppliers and not customers.”
Nevertheless, as it moves into new regions, Morrisons has a battle on its hands to change customers’ perceptions - a task made harder by an adverse press.
To back what’s happening in stores, Morrisons has launched a major advertising blitz, with plenty of local leafleting and regional advertising featuring the voice of gritty Sheffield actor Sean Bean, all designed to raise awareness of the products on offer and reinforcing the retailer’s famous (in the north at least) ‘More Reasons’ slogan.
But Harrison says the business is ready to let stores speak for themselves: “When you open a new store in an area where you haven’t been established before, people don’t know what to expect.
“It doesn’t matter if this is in the south or the north. Even in the north if we open a store in a new town we have to work hard to attract new customers to do their shopping there.”
Taylor agrees: “Every store is a new store; there are no different challenges in different parts of the country. We are currently seeing our strongest growth in Kent, an area where we had no presence whatsoever. When a new store opens people will go and try it so it is vital that we hit the ground running.”
The south is not the only new territory for Morrisons, says Harrison, who equates the job Taylor has in the south with his task of dealing with the stores in Scotland where Safeway was a strong player before it was taken over.
“We have being doing exceptionally well in Scotland, with the key being our ability to build confidence in the brand. We have opened five new-build stores in Scotland and each one has been better than the previous opening,” he explains.
Harrison says the key to Morrisons delivering success is that all its stores have to deliver. He says: “From now on our heartland is no longer the north of England but right across the country. We have one group of 360 core stores,” he says.
“I am confident that our standards are now good and given the chance to go about our business without all these distractions, I’m sure we can be great.”
What this also means is that Morrisons can make no more excuses. With Safeway a thing of the past, the ball is now firmly in Morrisons’ court.
Thumbs up?
>>what shoppers think
What shoppers think of the converted Safeway stores, in terms of range, quality, price and service, both nationally and in the north and the south
How much shopping do you do in your Safeway/Morrisons compared to last year?
NationalYorkshire South East
More24%25%29%
Less24%12%21%
Same52%63%50%
How has Safeway changed since being taken over by Morrisons? (%)
Range
NationalYorkshire South East
Better25%31%22%
Worse11%8%10%
Same26%33%25%
Not sure38%28%43%
Quality
NationalYorkshire South East
Better 18% 23% 19%
Worse 14% 8% 11%
Same 31% 41% 27%
Not sure 37% 28% 43%
Service
National Yorkshire South East
Better 15% 18% 16%
Worse 11% 9% 8%
Same 36% 45% 34%
Not sure 38% 28% 42%
Price
National Yorkshire South East
Better 31% 22% 29%
Worse 7% 14% 4%
Same 23% 34% 22%
Not sure 39% 30% 45%
Availability
National Yorkshire South East
Better 19% 22% 19%
Worse 10% 8% 10%
Same 31% 37% 27%
Not sure 40% 33% 44%
Research conducted by Harris Interactive’s Harris Poll Global Omnibus among a nationally representative sample of GB main grocery shoppers, October 20-24 2005. Contact: Caroline North 0208 263 5246 cnorth@harrisinteractive.com
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