Morrisons, the UK’s number four grocery chain has faced increased competition from discounters and seen a steady market share decline in recent years. The very late arrival to on-line grocery delivery hasn’t helped. Bigger rivals Tesco and Sainsbury have had more than a 15 year head-start.
CEO David Potts understands the need to make up for lost time and Morrisons is emerging as a business intent and able to respond quickly to market opportunities.
An early indication was the supermarket’s move following delivery partner Ocado’s devastating warehouse fire last year. With Ocado urgently seeking storage capacity Morrisons were able to negotiate the end of their exclusive on-line delivery partnership. It enabled Morrisons to become a named retailer on Amazon (rather than just a wholesaler) with the benefit of acquiring their own customers.
Morrisons on-line availability has been significantly extended with the combination of Morrisons.com and the Morrisons Store on Amazon Prime Now.
Morrisons, working with Amazon has quickly extended ultra-fast same-day grocery deliveries to more UK cities through Prime Now. It offers delivery within one-hour for eligible postcodes and moves Morrisons to a leading position for speed.
A more future-focused business is also evident in the trial of a new Morrisons Market Kitchen format in London that provides freshly-cooked meal options for on-the-go shoppers. These store formats have expanded rapidly in urban areas outside the UK where in-store purchases are often combined with delivery.
Morrisons’ new Market Kitchen in East London addresses the fast growing food-to-go market. The menu of freshly prepared food-to-go includes stir-fries, pizza, smoothies and wraps.
This week Morrisons announced it will create 3,500 new jobs to expand its home delivery service in response to the huge demand driven by the Coronavirus pandemic. It is compelling evidence of a more agile business – by addressing a ‘national need’ Morrisons can attract on-line shoppers now actively looking beyond their usual supermarket choice.
Morrisons, cleverly, has created a fixed-price food box delivered for £5. It is a simple, unique solution that solves the public’s primary need for grocery essentials to cover a period of isolation. It also addresses the challenge of fast fulfilment when stock levels are unpredictable as the selection is based on what is available.
Morrisons is likely to be winner from this disruptive period of high grocery demand. Having given competitors a huge head-start Morrisons should emerge better placed for a future where the delivery habit is more embedded. Partner Amazon may have already recognised this.