Comment: Philips travelling in the right direction

By MARTIN FLANAGAN
Published on 15/03/2013 00:00

YOU could argue that supermarket giant Morrisons has evolved into the classic “jam online tomorrow” company. Flippant maybe, but arguably accurate.

And it’s true that the group’s falling profits, diminishing market share and perceived slowness of foot in embracing online food shopping and convenience stores have combined to make it most observers’ selection as prime current loser in the supermarket wars.

By comparison, Sainsbury’s and Wal Mart-owned Asda have been resilient, and Tesco seems to be pulling out of its unexpected dip a year ago.

But beneath the headline fall in annual profits at Morrisons unveiled yesterday, there was enough from group chief executive Dalton Philips to suggest the company’s direction of travel is right.

By January 2014, Morrisons will have an online food offering for the first time, bringing it into line with its big three rivals. Online food retailer Ocado either will or will not be part of it. The companies are in discussion about a transfer of knowledge and expertise.

Morrisons says by next January it will also have 100 M local convenience stores operating compared to its current dozen, thereby giving it the beginnings of artillery to battle the likes of Tesco Express and Sainsbury’s Local.

Two of the key gaps in the company’s offering and competitiveness will therefore have been addressed, at least in terms of putting firm operations in place.

However, ironically, that could be when Philips, three years into the job this spring, will face his biggest test. The lack of online food and convenience stores, while significant negatives for Morrisons, have also been a handy lightning rod for criticism, deflecting attention from lacklustre sales in the group’s main stores.

Once addressed, the spotlight will swing on Morrisons’ core sales performance if it has not improved (although the new fresh food format is apparently doing quite well).

And if there has been no impressive uplift in like-for-like sales by then, the City is likely to say, in terms of challenges overcome, that two out of three is not good enough.

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telecoms giant Vodafone is ending its lengthy sponsorship of Formula One racing via its tie-up with McClaren. Vodafone has already quit sponsorships with the England cricket team and Uefa champions league football.

Could it be that saturation TV sports coverage, with omnipresent football in particular sometimes akin to background televisual wallpaper, is making the medium less “special” in promoting global brands? To fill the vacuum… Phone apps, Facebook, tablets, Twitter… would you come in?