As the dust settled this week over Morrisons’ shock 5.6% fall in like-for-like sales over Christmas, every man and his dog has had an opinion on what the company needs to do to turn around its fortunes.
“Turning Morrisons into a British Aldi or Lidl is not as easy as it sounds”
Ronan Hegarty, news editor
One of the most interesting view was that of Bernstein analyst Bruno Monteyne, who suggested that Morrisons should reposition itself as a British discounter.
You can see where he is coming from. It is haemorrhaging shoppers to Aldi and Lidl. It has an integrated supply chain. But the adjustment in strategy is much harder than it sounds: Morrisons lacks the buying power of Aldi and Lidl, as well as the big four. It also lacks, with its high-cost Market Street format, variable and generally larger formats and more comprehensive offer, the efficiency of the Aldi and Lidl model (while Asda continues to strip further cost out, in contrast with the Market Street Store of the Future format, by pulling out counters).
Aldi and Lidl compete on price, quality, consistency and simplicity. Even with online and convenience, Dalton Philips has his work cut out.