Following today’s release of Morrisons’ figures for the13 weeks ending 26 January 2025; Eleanor Simpson-Gould, senior retail aalyst at GlobalData, a leading data and analytics company, offers her view: “Morrisons’ latest positive Q1 FY2024/25 results indicate that the grocer has made progress in its turnaround plan and has begun to strengthen its financial position for the year ahead. Its Q1 total revenue improved 2.4% to £4.0bn. In comparison, the UK food & grocery market grew at an average of 2.2% between November 2024 and January 2025, suggesting Morrisons has outpaced the market and gained market share. Though Morrisons’ sales have remained buoyant in recent quarters, pressure on chief executive Rami Batiéh to provide long-term growth will persist as market headwinds build. To steer Morrisons clear of the pitfalls that have curtailed rival ASDA’s sales in the last year, Morrisons must go further to improve availability to limit further market share erosion.
“Morrisons is implementing practical strategy enhancements ahead of expected turbulence in the UK food & grocery market from rising food inflation, increased national insurance contributions, and minimum wage hikes. Having revealed savings of £56 million in Q1, Morrisons plans to make further cost-cutting measures within stores in Q2. Around 70 counters will be closed, alongside some floristry services and cafés, as it redirects investment to other business needs. However, this may negatively impact the loyalty of local customers, who may favour these services. Furthermore, Morrisons must be cautious, particularly when closing Daily convenience stores. As competitors ramp up investment in small store formats, Morrisons must keep momentum on enhancing its convenience footprint through rapid delivery services and improvements in store standards.
“Morrisons differentiates itself from the other Big Four grocers through its Market Street heritage and its own-brand cafés. While consumer preferences are shifting away from counter service towards quick meals and pick-up items, many grocery stores are moving away from instore cafés in favour of food service partnerships to offset costs and outsource quality and service standards. For Morrisons, these are differentiators that add controllable touchpoints to the customer shopping journey and enhance the shopping experience in its stores. Morrisons must be careful not to distance itself from its roots, and it should ensure that any plans to refresh store formats do not alienate older consumers and families who seek an engaging shopping journey.”
