Skip to main content

+44 (0) 121 237 1130


Retail Viewpoint – Morrisons

Morrisons continues l-f-l growth – but faces uphill struggle in the face of grocery mergers.

With the Sainsbury’s-ASDA merger hogging the limelight, Morrisons’ welcoming Q1 results this morning illustrated why it may also be an attractive target for investors and large conglomerates alike. Non-fuel sales growth increased year-on-year, stemming from Morrisons’ ability to more easily navigate inflationary pressures due to its vertically integrated supply chain. However, this quarter’s l-f-l sales increase saw significantly more reliance on the wholesale division, with retail only contributing half of the 3.6% l-f-l gain (compared to 88.2% for the same quarter last year).

At its core, Morrisons’ strategy is the right one. Store openings continue at pace (two over the quarter), and is appealing to eco-conscious shoppers through its in-store plastic reduction (aiming for all ownbrand packaging to be reusable, recyclable or compostable by 2025) as well as price-driven consumers through its “Wonky” brand of low-priced fruit and veg and new cheap “Savers” own-brand range of 300 products. Furthermore, the “Nutmeg” clothing line continues to gain traction, and its womenswear range is now available in 130 stores.

But CEO David Potts’ “Fix, Rebuild and Grow” turnaround strategy will not be enough to stave of the threat of Sainsbury’s-ASDA, where increased international buying power (particularly through the support of backstage giant Walmart) and significantly wider store network will eventually see the UK grocery market converge towards a Tesco-Sainsbury’s duopoly. Recent news regarding a botched Amazon approach for Waitrose shows that the US online behemoth has its eye on the UK F&G market – and Morrisons may be a viable target, given its already existing “Amazon at Morrisons” delivery partnership.

Source: GlobalData 10 May 2018

May 2018

Share this Post

Strictly Necessary

These cookies are required for our website to operate and include items such as whether or not to display this pop-up box or your session when logging in to the website. These cookies cannot be disabled.


We use 3rd party services such as Google Analytics to measure the performance of our website. This helps us tailor the site content to our visitors needs.


From time to time, we may use cookies to store key pieces of information to make our site easier for you to use. Examples of this are remembering selected form options to speed up future uses of them. These cookies are not necessary for the site to work, but may enhance the browsing experience.


We may use advertising services that include tracking beacons to allow us to target our visitors with specific adverts on other platforms such as search or social media. These cookies are not required but may improve the services we offer and promote.

Change Settings

Welcome. You can control how we use cookies and 3rd party services below

Change Settings Accept
Learn how we use cookies