Morrisons sales slump is ‘rippling down to the staff’

A profit warning. An almost £1bn write-off. A price war. Leaked payroll details. On top of the 2.8% slump in like-for-like sales and the 13% decline in underlying pre-tax profits to £785m, the news emanating from the Morrisons bunker is likely to come as a further blow to many employees, amid growing evidence that morale at store level has taken a turn for the worse.

Staff bonuses are linked to the retailer’s profits so any dip in profits is always likely to illicit grumbles. But the number of staff contacting The Grocer, and posting on employee forums to express their current frustrations suggests the discontent is about much more than money. The volume but also the sheer hostility of some of the comments (see box) suggests there is real anger at a shopfloor level with the way the business is being run. And their anger is focused quite clearly on the most senior positions.

After Dalton Philips unveiled his latest turnaround plan on Thursday, one described the Morrisons CEO as “deluded”. “He’s like Hitler in the final days of the Third Reich,” he wrote on the Morrisons staff forum.

While some of the vitriol is deeply personal, it’s also instructive of operational issues. The biggest gripe is over staff levels in its stores.

A Morrisons department manager who contacted The Grocer said: “Main problem in stores is an absolute ridiculous lack of staffing. Can’t even keep basics on sale when it gets busy. Retail 101 - have product on sale. I’m sure you have heard this from numerous people, though.”

Another poster on the Morrisons staff forum last week claimed that a lot of colleagues have left his store and “nobody seems to be in a hurry to replace them”.

” This slight dip in execution will not be doing them any favours”

Bryan Roberts, Kantar

“Our manager has told the higher-ups that we don’t need to recruit. But it’s blatantly obvious we do. Everybody is near breaking point working even harder to try and cover the staff we have lost, but he still wants things to be done as if we still had the original amount of people we had when we opened,” he writes.

“I realise Morrisons had a tough Christmas but surely not having the right amount of staff to fill the shelves and serve on the checkouts isn’t going to bring customers back into store when they couldn’t get the hot service we could give them [in the past].”

Another Morrisons staffer responded: “I don’t understand how the powers that be can’t see we’re all struggling not just one day but every day. Answers on a postcard please addressed to Dalton.”

Listening

Morrisons insists it is listening to its employees. “We measure colleague satisfaction on a regular basis, with the next survey going out this week to our 134,000 colleagues. It’s not unusual for an organisation the size of ours to have individuals who from time to time express negative opinions,” a Morrisons spokesman told The Grocer.

“We think all constructive feedback is valuable and we listen to all of it, and do our best to implement changes in response where possible. Both engagement and retention at Morrisons are consistently high and we’re committed to maintaining their upward trend.”

The concern for Morrisons must be the unquantifiable impact low morale has on its overall performance.

Kantar Retail insights director Bryan Roberts says “the constant swirl of negativity around Morrisons in the media will be far from energising for the shop floor staff.

“I’ve spotted a few signs that standards might be on the wane, with some stores seemingly unable to cope with surges in demand for promotions and some uncharacteristic merchandising errors creeping in.

“I don’t think they are anywhere near the state that Tesco was in three years ago in terms of letting the basics slide, but at a time when they need to be really on top of their game, this slight dip in execution will not be doing them any favours,” he adds.

“The leadership is clear”

Last month, Morrisons held a meeting with store managers to outline its strategy and Chris Ellis, whose store in Cardiff recently won the Grocer 33 Store of the Week award, said that management had gone through a lot of new initiatives and it was “a strong plan and the leadership is clear”.

But Retail Remedy director Phil Dorrell believes Morrisons could still do a better job of communicating with its staff.

“The morale of supermarket staff is not only an important factor in helping achieve improved customer satisfaction, but also reduces the costs that result from staff turnover and absence. Both staff turnover and sickness-related absence are greatly affected by poor morale. Usually this is a local issue, but with Morrisons and probably the Co-op, too, the leadership has been so uninspiring that the feel-bad factor is rippling down to the staff,” he says.

“In order to turn this around, Morrisons needs to re-engage its teams and inform them of the plan to regain market share. The staff need to be positive about the direction they are headed in and feel they are working towards a desirable end goal. With Morrisons, that certainly hasn’t felt the case for some time. Inspired leadership is required, not over-management. The way forward for Morrisons is to set a clear vision and align its teams behind it.”