Morrisons’s Results

I always try and make reference to businesses found in town. The students often find it easier to relate to and analyse. Morrisons is the the major supermarket in the town centre and last week they published promising results especially given the bleak economic times.

Recent results published by the firm show that half yearly profits are up 8% to £442m, the chief executive Dalton Philips puts this down to a growing band of ‘professional shoppers’. These are shoppers who are hunting down price promotions, switching to own label products and avoiding restaurants to cook at home. During an interview on Sky news Mr Dalton explains that one in three of his customers have run out of cash by the end of the month and one in two will check the price before putting the item in the basket. These factors have seen a reduced use of credit cards in the store and splitting of bulk buying packs with friends.

Customer confidence has been severely hit by high inflation, poor real wage growth, stagnate house price growth and the fear of job losses. Morrisons weathered this storm with record customer numbers and total sales increasing by 7.4% to £8.7bn. This like for like sales are growing faster than Tesco’s, Sainsbury’s and Asda.

A combination of a sound understanding of customer needs and savy marketing has given Morrisions a little boost in a highly competitive industry.