With the recession biting deeply it was always going to be a difficult Christmas for retailers.
The majority were not expecting miracles, but they were hopeful that this year’s figures would at least match last years. The top three supermarkets have yet to release their interim sales figures yet, but seem to be confident that their sales figures will hold up. Morrisons though has already stuck its head above the parapet. In truth, it probably wishes it hadn’t: like-for-like sales which exclude new store openings fell dramatically in the year to 30 December. The UK’s fourth biggest supermarket describes the figures as ‘disappointing’, whereas most marketing analysts are claiming the 2.5% drop in shop sales is little short of disastrous. However the supermarket believes its full year results will be roughly in line with expectations.
So what went wrong at Morrisons this year?
Did it fail to remain competitive, or was there some other underlying factor that meant the supermarket was always likely to be fighting the recession with one arm tied behind its back?
Well, there are a number of reasons why Morrisons’ share of the Christmas market fell this year. It failed to match its competitors on price and offers and it mounted a Christmas marketing campaign which was greeted with apathy on the social media. However what probably cooked Morrisons’ Christmas goose well and proper was its inability to compete online. The supermarket chain is the only one of the four major retailers that does not yet offer a comprehensive online shopping experience. Online marketing is highly lucrative, and offers customers the opportunity to shop and spend money at a time that is convenient to them. Any retailer that fails to have an online presence will struggle to compete, as Morrisons have discovered.
So what can the supermarket chain do about it?
Well, the bottom line is it needs to improve its promotions, and it has to become more competitive. Last year’s dull Christmas campaign failed to create any sense of anticipation and excitement on Facebook and Twitter. So it needs to up its game there. It also has to make sure that it has a full online presence as soon as possible, or it will continue to fall further behind the competition. In a statement the retailer admitted as much:
“Notwithstanding these difficult market conditions, which we expect to continue through 2013, our sales performance in the period was disappointing. This reflects both the need to improve our promotional innovation and the communication of our points of difference, and the accelerating importance of other channels, such as online and convenience, which Morrisons has only recently entered.”
So what is Morrisons intending to do to improve its performance over 2013?
Well, for starters it plans to open 70 new convenience stores by the end of the year, and it is in the process of revamping its advertising, having announced at the end of last week that it had signed Ant and Dec to front its commercials. The supermarket chain will also be sponsoring some of their Saturday night television programmes such as Britain’s Got Talent and Ant & Dec’s Saturday Night Takeaway. It maybe a little late to the online-party, but it would appear that at least the penny has finally dropped.