Leapfrogging a generation of grocers

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Morrisons’ chief executive Dalton Philips admitted last Thursday that the supermarket giant has been lagging behind its peers, by as much as five to ten years. 

That’s quite a confession.

Of course, it came as part of a speech explaining the retailer’s £300 million capital expenditure programme to put all that right.

But this news raises an interesting point about its strategy. By being a late adopter, Morrisons can now take its pick of the latest and best innovations, and learn from others’ mistakes.

“Retail history is littered with stories of how the Big Bang has gone badly wrong. So we decided to put in the effort to get it right first time. We call it radical evolution,” said Philips.

And he was candid about quite how outdated some operations still are.

“We’ve been running a 21st Century business on systems and infrastructure firmly stuck in the 20th Century.

“Even in 2013, our store managers have no real-time way of knowing what products are on their shelves, in the stockrooms or where replacements are in the distribution chain.”

He said that the supermarket’s aim is to become “a true national multi-channel and multi-format player,” alluding to its previously meagre convenience offering, and the fact that until recently Morrisons has been conspicuous by its absence from the online grocery market.

But there is something to be said for biding your time.

Morrison’s reckons it has the strongest credit rating of any retailer in Europe, and that the new development will be the most advanced rebuilding of retail systems anywhere in the world.

It is set to launch its home delivery service from January next year with fulfilment provided by Ocado.

And it recently opened its second dedicated convenience hub to support the rapid roll out of more than 60 M Local convenience stores in locations acquired this year from HMV, Blockbuster and Jessops.

So perhaps the reluctance to innovate was really part of a cunning plan to swoop in and beat the field at the last moment…

Philips concluded: “When completed, our business and stores will go from having the worst systems to the best, leapfrogging a generation.”Johanna Parsons

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