Morrisons boss Dalton Philips has rejected claims by a retail analyst that its focus on launching online food sales is irrelevant to its customer base.
Phil Dorrell, director of the retail consultants Retail Remedy, says that instead of pinning hopes for a sales revival on a digital push – when it will bid to catch up with competitors by selling groceries online in partnership with Ocado – the Bradford-based supermarket needed to get its main stores working better and revive its brand.
Mr Dorrell said: “Right now, relative to its competitors, Morrisons is dated and digitally nowhere.
“It admits as much, too. Its hopes are pinned on next year and the great digital push.
“The only worry is that if it markets its online proposition like it has been marketing its stores then it will be on a hiding to nothing.
“Another challenge, of course, is that it has the oldest shoppers among the big four grocers, who are not exactly known for online retailing.
“What it really needs to do is get its big stores working and revitalise its brand but this simply isn't happening.”
But Morrisons chief executive Dalton Philips denied its online strategy – which he said would see it delivering to 50 per cent of households in 2014 – would be at the expense of its stores.
He said: “Our core supermarkets are the engine room of our business, attracting nearly 12 million customers a week.
“Our Market Street proposition differentiates us from the rest and we now have our Fresh format in 50 per cent of stores.
“Our online offering will have technology to make it super easy to use.
“Online is something our competitors have been doing for the past two decades and will be a key part of Morrisons future as we also continue to improve our stores and roll-out the M Local convenience sites.”
Britain’s fourth-biggest grocer blamed worsening trading in the 13 weeks to the start of November – which saw like-for-like sales slump by a larger than expected 2.4 per cent – on its weakness in convenience and online retailing along with subdued consumer confidence. The fall followed a 1.6 per cent decline in the six months to the start of August and industry figures showing the chain’s market share shrank to 11.2 per cent from 11.4 per cent a year ago.
Morrisons said the supermarket grocery market – in which sales growth had declined by 40 per cent – will remain “challenging” for the rest of the year, but insisted the latest performance was in line with its expectations.
Mr Philips said Morrisons would have 100 convenience stores by the year end and open another 100 in its next financial year.
While Morrisons performance was unlikely to turn the corner until 2015, Mr Phillips was confident it will record like-for-like sales growth in its November to early-February quarter, including the crucial Christmas trading period.
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