Morrisons ‘warned’ to stick with manufacturing

Since taking over the beleaguered retailer last month, various opinions on what Potts should do to secure Morrisons’ future have surfaced.

Head of the food team at Rollits solicitors Julian Wild, in an exclusive interview with FoodManufacture.co.uk, advised Potts to sell the company’s manufacturing facilities and focus on food and drink retail only.

The story, which was read nearly 6,000 times and shared more than 230 times across FoodManufacture.co.uk’s social media platforms – including Twitter, Facebook and LinkedIn – provoked readers to share their comments online.

“Morrisons’ vertical integration has historically allowed the business to maintain superb profit margins and swift reactions to market changes,” D Connacher wrote.

‘Whiff of premium’

“Potts should focus on reinvigorating Market Street and moving the concept towards convenience, quality and competitive prices and away from [Dalton] Phillip’s Fresh Market concept that had a whiff of premium about it – Morrisons’ manufacturing is integral to the Market Street concept.”

Another reader, who claimed to work for Morrisons, agreed with Connacher and wrote: “This [manufacturing] is Morrisons’ point of difference and what people love about Morrisons.”

Getting rid of the retailer’s manufacturing facilities would “rip the heart out of the company”, the worker added.

A third reader, George Seward, urged Morrisons to use its vertical integration to boost its market share. “Morrisons has a great opportunity to differentiate itself from its rivals, especially in its meat operations,” he said.

Seward’s comments reflected those of City analysts Clive Black and Darren Shirley, who, on Potts’s first day at Morrisons, said he should “weaponise” the retailer’s food manufacturing capabilities.

‘A weapon that can be used’

“If it is a weapon that can be used to differentiate to customers the benefits [of shopping at Morrisons], then it is worthwhile,” Black and Shirley said.

Potts hasn’t revealed what he plans to do with Morrisons’ manufacturing facilities yet.

However, the former Tesco exec has made cuts to his senior management team in a bid to “speed up” the business and, according to some analysts, make it more like Tesco.

As part of the plans to reshape Morrisons’ operations, up to 25 senior bosses could face redundancy.

A Morrisons spokeswoman said: “Following the announcement of a reshaped management board, we have had a number of redundancy conversations with senior managers at the next level in our organisation. These are aimed at creating a simpler and leaner Morrisons.”

Other plans revealed by Potts to make Morrisons a better business included his initiative for head office staff to work on the shop floor over Easter, to persuade them to “listen hard” to customers and store colleagues.

Meanwhile, watch out for FoodManufacture.co.uk’s picture gallery round-up of Potts’s first month at Morrisons.