Status: Married to Alexandra, with two 17-year-old twins (a boy and a girl), and two dogs
Hobbies: I love football. I played up until I was 40 but injuries stopped me in the end. I coach my sons now. I’m a big fan of Ajax, and Manchester United over here. Louis van Gaal has come in at a difficult spot, let’s see what he can do. I also like to go sailing in the summer, or when I get time. I also work out, but that is more of a necessity than a hobby
Favourite meal: It would have to be veal cutlets, with some al dente pasta and a rich tomato sauce. I’d have a good glass of Italian wine with it, maybe a Barolo. It may not go with the meal, but I really like it. I would like a chocolate mousse after that
Casper Meijer is not the first Dutchman to be parachuted into Morrisons in recent years. Former CEO Marc Bolland came in following the calamitous acquisition of Safeway in 2006. But it’s another of his countrymen the commercial director most relates to - Manchester United boss Louis van Gaal.
A passionate football fan himself, supporting Ajax in his homeland and - appropriately - Manchester United in the UK, Meijer, like van Gaal, has been tasked with restoring the fortunes of a famous old Northern institution after a period when results haven’t been good enough for some time.
“I think that’s totally untrue and total rubbish, basically. They are comparing two things with a tenfold difference”
Neither has cracked it yet, and it’s hard to say with any certainty which of the two has the most chance of success - particularly given the strength of the competition. So is he feeling the heat? Especially given that his predecessor as group commercial director Richard Hodgson paid the price for poor trading two years ago.
“Of course these jobs come with pressure,” he admits. “But I would not be the person I am today if I was not able to cope with that. In the end I will do my best and the rest is up to other people.”
Results certainly haven’t been good since he arrived in early 2013 and you would think there was little encouragement to be found in the most recent numbers. Like-for-like sales in the 13 weeks to 2 November fell 6.3%, coming on the back of almost three years of poor trading and a new pricing strategy that has effectively halved the retailer’s profits forecast for the current financial year.
Despite the figures, Meijer remains optimistic. “I have every confidence in our strategy and results actually show we are looking at some green shoots.”
To back this up, Meijer points to the relative performance of Morrisons in recent Kantar Worldpanel market share figures. The latest figures for the 12 weeks to 12 October show total Morrisons sales fell by 1.8%, compared with Tesco’s, which were down 3.6%, and Sainsbury’s, which fell 3.1%. Of the traditional big four, only Asda recorded any sales growth, up 1%.
The other metric Meijer points to is the number of items Morrisons shoppers are putting in their baskets. In the latest quarter this figure fell 2.4% compared with a massive decline of 6.9% in the final quarter of 2013/14.
“When you look at where a value-led recovery strategy should be, it is on the volume side. If you look at our items per basket, that is the volume growth we needed to see. More people buying more items is what it is about,” he explains.
Morrisons CEO Dalton Philips has previously advised the City that an actual turnaround into positive sales growth is not expected until further in 2015 at the earliest. Charged with developing a strategy to compete more effectively in the rapidly changing UK grocery landscape, Meijer admits the UK is far more competitive than any of the previous markets he has worked in - mainly the Netherlands and the US.
“We made an early call, not just to fight the discounters but to really address the structural factors in the industry, and I think there is huge recognition in the industry that we called that early,” he says.
Price cuts and promises
So what exactly is the plan? In May, Morrisons slashed the prices of 1,200 everyday items by an average of 17% and followed this up with a further 135 cuts in June. Meijer was angered recently by a Sunday Times story that accused Morrisons of going back on its pledge to permanently lower these prices, after an investigation found that 107 of these lines had gone up in price, albeit not above the original level.
“Of course we are not immune to any kind of cost inflation, so sometimes we need to pass that on to the customer, but we try to be minimal about this,” he explains. “We didn’t say we would never increase those prices. We said there might be circumstances when we would have to make a decision. But you have to look at this as a long-term commitment to manage price in a different way and to keep value for the customer high in the positioning statement of our company.”
And, of course, in October, Morrisons launched a price matching/loyalty scheme, Match & More, which compares prices at Aldi and Lidl as well as its big four rivals. But aside from price cuts and promises, key to Meijer’s role in the strategy is simplifying the retailer’s offer: reducing the number of promotions and reducing complexity and duplication in terms of range, while also making more of Morrisons’ own-label offer.
suppliers who have dealt with him over the past 18 months say they find him collaborative rather than combative, but some have expressed concern that in his drive to make Morrisons a leaner, meaner fighting machine he risks reducing the range so drastically it will negate a key advantage that supermarkets still hold over the discounters - choice.
“The market is the market. Some cards you can’t change, but you can control your own destiny”
The theory certainly seems to ruffle the normally phlegmatic Meijer’s feathers. “I think that’s totally untrue and total rubbish basically,” he retorts. “They are comparing two things that have a tenfold difference. We have a range which is so much bigger than the discounters, but the fact of the matter is that if you spoke to our customers back in early 2013 they were saying that we were confusing on the shelf, that we had too many promotions, too much range and that is what we have tried to address.
“In total we have taken about 10% of range out and it’s not a reduction of choice. Suppliers who have great brands, great ranging, great products and great margins have nothing to fear from any kind of category management we are trying to do.”
Meijer says the range review is not as simple as stripping 10% of lines across the board; the review is being carried out on a category by category basis and products are removed where necessary. He says the ready meals category was far too complicated and by cutting back, the retailer is seeing an improvement. “This is not a SKU reduction programme but a category management one. That sounds like a nuance but it makes a big difference in how you focus as an organisation.”
Closer to the discounters
In May, Meijer was also given overall responsibility for driving the Morrisons own-brand strategy, following a two-and-a-half year programme which had seen the rebranding, reformulation and development of more than 10,000 own label lines. This year, own brand director Belinda Youngs and executive chef Neil Nugent both left the business, but Meijer insists this doesn’t mean the work had failed.
“We had to professionalise our range and that legacy is something we are now using in the next phase of our own-brand strategy,” he says.
When it comes to price-matching the discounters, Meijer plans to leverage Morrisons’ standard own label against them, rather than using its Savers entry-point own label. “We are looking to simplify our brand architecture and fight from the main part of our own brand, which we are going to position in price much closer to the discounters. As a result, over time, you will see less Savers in stores.”
Meijer’s other main project has been the development of Morrisons’ new supplier relations programme M Partners, which is designed to create closer relationships with some of the retailer’s leading suppliers, develop long-term growth plans, and learn from those suppliers when it comes to selling into convenience and online, which are still relatively fledging channels for Morrisons.
He is adamant that the scheme is a success and refutes industry rumours that it exists only to generate extra cash by offering privileged access to the Morrisons inner sanctum based on the highest bidder in each category.
“If you look at items per basket, that is the volume growth we needed to see. More people buying more items is what it’s all about”
“That’s absolutely untrue,” he says. “We only made agreements with suppliers we wanted to make agreements with. It was not open to all suppliers. When I arrived in 2013, Morrisons treated every supplier the same way, whether they were big or small, whether they wanted to work with us or not. I don’t believe in that method, because if you are embarking on a new strategy, where you are making big changes in your organisation and entering new channels, you benefit from a collaborative approach with your suppliers. This means you have to invest time, which means you can’t have the same relationship with everybody.”
Rather than having a simple buyer and account manager relationship with just one point of contact between supplier and retailer, M Partners works on other fronts including supply chain, technical issues and even sourcing.
So far, 20 suppliers have signed up, including Unilever, and Meijer suggests a further five could be added in the next year.
Closer to the customer?
With all this work going on, as well as online and convenience, major supply chain work and systems upgrades that will pave the way for sales-based ordering, on top of price-cutting and price-matching and further store format changes, Morrisons has been accused from many sources of not quite knowing what its customers want. After almost two years in the job, does Meijer think these are fair comments?
“No. I think we do know what our shoppers want. If you go back to what we set out what we wanted Morrisons to be, which is a value-leading retailer with a focus on fresh, it’s clear we have worked a lot on value and we will continue to. The market is the market. Some cards you can’t change, but you can control your own destiny. And I think by focusing on what our customers want at the highest level of the business, we can succeed.”