Supermarket chain Morrisons is to open its first convenience stores next year, and may finally branch out into internet shopping. Chief executive Dalton Philips announced details of his new strategy this morning, almost six months after replacing Marc Bolland. He said Morrisons was missing out on growth opportunities because of its focus on larger grocery stores and its refusal to follow other supermarkets online.
“In the first half of 2011 we will begin a trial of a new convenience format and we are currently investigating the opportunities for Morrisons in the internet grocery channel. Morrisons’s past success has been built on being different in the offer we bring to customers, and this will continue in any new areas for business development,” the company told the City.
Since joining Morrisons at the end of March, Philips has been reviewing the business – which enjoyed considerable success under his predecessor. He is planning to create new own-label brands, and launch initiatives to drive Morrisons’s fresh food credentials.
“I am delighted to be leading a great company and, with the whole team, I am determined to make Morrisons better than ever,” Philips said.
Analysts have been eager to hear about a new strategic direction. The supermarket company recently completed a four-year “optimisation” plan to repair its profits following the troubled takeover of Safeway in 2004.
Unlike rivals such as Tesco and Sainsbury’s, Morrisons has not been tempted to offer an online shopping service. Last year, Bolland said the company was “looking into it”, but was keen to avoid the mistakes made by others.
Philips announced his new strategy alongside the group’s interim financial results for the six months to 1 August. Turnover rose 9.1% during the half-year, with the number of customers hitting a new record of 800,000 a week. Like-for-like sales growth slowed, though, to 0.9%, while the amount spent by each customer dropped by 0.2%.
“We expect low market growth to continue in the second half of the year, with further pressure on the consumer,” the supermarket cautioned.
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