Biting the elephant's ankle

Much has been made about the relative performance of the UK supermarket chains over Q4/2008, and in the first weeks of 2009. Of particular note have been headines telling us how Tesco customers are deserting the market leader for Asda and Morrisons -- the latter having shown the best like-for-like growth last year, compared to their rivals. Indeed Morrisons' efforts since the arrival of CEO Marc Bolland, have much to be applauded.

As a loyal but hyper-critical Tesco shopper, I thought it time to see if I too could be seduced by Morrisons' promises of low prices, innovative store ambiance -- "Market Street", friendly counter staff, etc. Thus I found myself this morning at their Queensbury branch in North West London.

In summary, my initial very positive first impressions rapidly dissipated, as I encountered an offer characterised by inferior choice and variety. Sure their prices appeared competitive, with prominent "Price Crunch" messages and communication of temporary price reductions. I left the store uderwhelmed, in spite of a much lower than usual basket price of £77 vs. £100 usually spent at Tesco. This is not a true £20 saving. The fact is their range didn't inspire me to make much of an effort to shop, and I'll have to make up the shortfall during the week.

On entering the store, the first thing you see is their produce display coordinated with other fresh food departments as "Market Street". This looks very attractive -- much more than the somewhat sterile Tesco displays. However, the assortment was very poor in comparison. The lack of choice extended across all categories -- exotic fruit and vegetables were entirely absent, as was a range of fresh herbs. Given the large Asian population in the store's catchment area, I find this frankly astonishing.

The "Market Street" theme extends into the bakery section, and this area offered a more interesting assortment than I usually find at Tesco. However, merchandising standards were poor, with insufficient space allocated to display the range at its best.

The much vaunted fresh meat, deli and fish departments failed to deliver the promise suggested in Morrisons' TV advertising. Whilst having more space and more staff than their Tesco equivalents, again the assortment appeared uninspiring. Progress down the aisles was impeded by stand alone displays of random cheeses, olives and cooked meats, which seemingly had no purpose nor integrity with the overall display -- ie. not promotional lines, nor new products. The salad bar however was excellent. The problem was that nobody appeared to be buying anything from it.

Strangely the ambient / frozen food display was broken in two by a very large homeware section. The assortment was much more comprehensive than found in a similar sized Tesco. Other non foods included a large electricals section, and a somewhat underwhelming stationery, books and DVD offer. Greetings cards were displayed in a separate kiosk with news / periodicals and tobacco. Valentine's Day cards were in a pathetic stand-alone Hallmark-branded unit -- a missed opportunity, given this event is in 2 days time.

This store doesn't know if it is a multi-category hypermarket or a destination food outlet. Neither format is effectively delivered. Too much space is given to non foods at the expense of grocery. This constrains the assortment and diminishes opportunities for influencing shopper purchasing.

Looking at my fellow shoppers, basket quantities were modest. Like me, they probably also were uninspired to buy.

Morrisons haven't fully exploited the opportunity of this store. They need to get a better understanding of customer needs and requirements, and address space imbalances. If this is a typical Morrisons, then Tesco have little to fear from them.