As far as we are aware (we’re not Sun readers), it is not often that a firm’s operations strategy gets discussed in the The Sun. But that’s just what happened this week (see article). The supermarket chain Morrisons was accused on moving away from the low cost strategy that made it successful, and becoming a Safeways ‘look-a-like’. The criticism is based on a number of new initiatives the firm has undertaken – to offer organic foodstuffs, to open convenience stores (M-Local), and to acquire Kiddicare and begin stocking children’s clothing. The Chief Executive countered this by identifying that his chain was the best performing supermarket brand in 2011.
Moreover, in the four weeks leading up to 8th July, Morrisons sales were up 1.4 per cent, against 0.6 per cent at Tesco – which might be due to a recent in-store merchandising campaign that promoted Morrisons low prices. But in the same period Asda was up 3.4 per cent, which demonstrates just how competitive this sector is, and how volatile performance can be.