Morrisons’ revival relies on manufacturing: new boss

Higginson stressed the contribution to be made by the retailer’s farms, fish business and abattoirs in an interview with The Sunday Times​ yesterday (January 15).

“As long as manufacturing is a weapon that makes us do a better job for customers, it’s got a place at Morrisons for ever, really,”​ said Higginson. He also expressed surprise the retailer did not capitalise more on its manufacturing links during the horsemeat crisis. “They missed an opportunity there.”​

The retailer should have “owned” ​the solution to the horsemeat crisis because the retailer knew there was no horse in its fresh meat because it controlled its supply chain and ran its own abbatoirs.

Get rid of its butchers​ 

Tesco’s decision to get rid of its butchers was certainly a mistake, said Higginson, who was formerly an executive director​ with the nation’s biggest retailer.

But when it came to revitalising the fortunes of Morrisons there would be “no sacred cows,”​ he said. The remedy to Morrisons’ malaise would be found in no single solution but a range of small moves, he said. Those would include making prices more competitive, boosting staff numbers in stores, improving promotions and stressing the provenance of meat and fish supplied by Morrisons’ own farms.

Restoring sales at the retailer’s big supermakets would also play a key role, said Higginson. In contrast to outgoing ceo Dalton Philips, Higginson did not emphasise the importance of boosting sales through online and convenience channels.

Turmoil in the grocery sector​

Turning to the turmoil in the grocery sector, Morrisons’ decision to “posh up”​ its stores was ill-timed, he said in a wide-ranging interview. “Morrison has a fantastic reputation in fresh​ [produce], and in an attempt to modernise it and bring in new lines – a lot of which worked, by the way – they poshed up the stores at a time when the recession meant customers were looking for a bargain.” ​

Perhaps Morrisons’ range had looked a little more expensive than it had previously. “But essentially the problem was chasing the prices and it was a common problem, not unique to Morrisons. In widening the gap to the discounters they opened the door, gave them oxygen …”​

Also market leader Tesco had failed to show leadership, which had exacerbated the problems, he claimed. “What was missing was the insight and the courage to go back to institutional shareholders and say: you know what, this growth thing in a recession is really proving quite difficult and we ain’t gonna be able to keep widening our margins indefinitely and improving returns at a time like this.”​

Meanwhile, Morrisons’ ceo Dalton Philips announced his decision to leave the business​ earlier this month after five years at the helm. The announcement followed news that the retailer’s like for like sales had fallen by 3.1% over the key festive period.

Read the full article in The Sunday Times​ here​.