UK: Morrisons ready for Tesco fightback says CEO
Last year Morrisons launched a new fresh food concept in 12 stores, introducing 350 more fruit and vegetable products, reducing space given over to processed foods and knocking down walls so customers can see its butchers, bakers and fishmongers in action.
The revamped stores posted a 14 percent rise in produce sales, with delicatessen sales up over 40 percent.
Some 48 stores will have the new format by July, at a cost of 1.7 million pounds ($2.7 million) per store.
"This will be a differentiator, this is game-changing stuff," Chief Executive Dalton Philips told reporters.
"We'll have 15 percent of our sales going through these new fresh formats by the end of the first half. It's almost impossible to replicate."
On Monday Tesco began its fight back after a shock post-Christmas profit warning, detailing plans to create 20,000 jobs, open new stores and refresh hundreds of existing stores with a focus on improving its offers of fresh produce, fresh meat, bakery and counter services.
Morrisons' Philips said: "We're taking the fresh market experience to a whole new level and just moving it right on. We can do that because we've got these craft skills in our business, it's part of our culture.
Morrisons, which trails Tesco, Wal-Mart's Asda and J Sainsbury in UK market share, posted a profit before tax and one-off items of 935 million pounds in the year to Jan. 29, helped by a focus on fresh foods and low prices.
That compared to analysts' average forecast of 922 million pounds and 869 million pounds made in the previous year.
Turnover rose 7 percent to 17.7 billion pounds, with sales at stores open at least a year up 1.8 percent.
Source: www.reuters.com
