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Morrisons: multichannel in a time of turnaround

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Morrisons today signalled the start of a turnaround in its business as it reported its first rise in sales and profits for five years. Turnover of £16.3bn in the year to January 29 was 1.2% up on the same time last year, while pre-tax profits of £325m were 49.8% up on the same time last year.

David Potts, chief executive of the supermarket, a Top100 retailer in IRUK Top500 research, said the turnaround was underway. “Our full year of like-for-like sales and profit growth was powered by listening to customers, and shows what our hard-working team of food makers and shopkeepers can do.

“But, it’s only one year. Our turnaround has just started, and we have more plans and important work ahead. If we keep improving the customer shopping trip, I am confident that Morrisons will continue to grow.”

We took a look through the figures to see how its multichannel strategy and approach to the customer experience is developing, and whether it contributed to sales rising.

The online contribution to profit

Long-term, Morrisons aims to achieve profits of between £50m and £100m from online, wholesale, services and interest. Among its wholesale relationships is one with Amazon, which delivers its groceries as part of its Amazon Fresh service. This year those incremental profits came to £18m.

During the year, Morrisons announced new partnerships with Amazon, Timpson, Rontec and said it would revive the Safeway brand. It also updated its plans for Morrisons to grow profitably with Ocado, which powers the operation., it said, is progressing well.

“With our partner Ocado, we continue to provide industry-leading customer service metrics for on-time delivery and order accuracy,” it said in today’s statement. “We are working together to keep improving the profitability of our existing offer out of the Dordon customer fulfilment centre (CFC).”

The customer experience

Morrisons says it’s becoming more competitive for customers through lower prices and improved quality.

It also plans to add more “complementary retail services” such as hand carwash and tyre-change concessions, which, added to the deal with Timpson, gives customers the opportunity to get more done when they are at a supermarket. That’s an idea that Sainsbury’s took still further in its acquisition of Argos , enabling shopping to collect their online orders from a wider range of

Crosschannel delivery

The supermarket says its high-footfall supermarkets are popular for pick-up services. It has Amazon lockers in more than 400 stores, and, following a trial, is rolling out a partnership with Doddle.

This year it will also launch a picked-from-store home delivery service using Ocado-developed technology. It says the launch of the Erith customer fulfillment centre in 2018 will increase access to the south of England, including London.

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