Comment: Philips needs to restore investors’ faith

A CATASTROPHIC fall in sales and market share. A company in meltdown. The language surrounding supermarket chain Morrisons will hardly be music to the ears of chief executive Dalton Philips, whose coat must be well and truly on the shoogly peg.
Terry Murden. Picture: Ian GeorgesonTerry Murden. Picture: Ian Georgeson
Terry Murden. Picture: Ian Georgeson

Philips has had a tough time since succeeding Marc Bolland four years ago and investors wonder how much is down to some serious misjudgments and how much to bad luck.

Analysts are in no doubt that he has some serious work to do to rebuild a company whose shares fell sharply yesterday on terrible figures.

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All the big guns are facing serious competition from the discounters, but none more so than the Bradford-based business which is in danger of losing its way.

It is already late into online and convenience stores and no amount of tough-talking from Philips will change that perception until he starts delivering better numbers and a strategy that tackles its underlying problems. Morrisons is criticised for its dated format, lack of excitement and uninspired marketing. One analyst said it had a “zero sense of direction”.

While the City appears to find Philips a charismatic and engaging personality, he needs to exert leadership and get some of the basics right. The board has already decided to abandon the Kiddicare venture. But the chain is caught between its bigger rivals and the budget chains. Unless action is taken quickly Philips may find himself past his sell-by date.

Trams can deliver an economic boost

the Edinburgh trams have been such a long time in coming it is no wonder they are being greeted with a mix of surprise and relief.

Everyone has suddenly turned into a tramspotter, eager to post photos on social media sites and boast about the experience. The test runs have already made them a familiar sight and scheduled services are now just weeks away.

Memories of the disruption will fade as the city gets used to them, and already trade has picked up in areas badly affected, particularly around the west end. The city is now expecting an uplift as more shoppers and tourists arrive merely for a chance of a ride, but more importantly because they see the tram as a better way of getting in and out of the centre.

Another beneficiary will be the area along the outer “tram corridor” running from the airport and through the Gyle to Haymarket. The tram is already stimulating more interest around the business park among potential tenants with a need for proximity to the airport and the west.

After the outrageous cost and delays in building the eight-and-a-bit mile route – working out at some £100 million a mile – the council still has to win hearts and minds. To that extent, it must be pleased with the positive reaction so far. It will need that support to continue should it try testing public opinion once more by planning to take the tram to other parts of the city.