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"Morrison's CEO defends the retailer's "fresh format"

Morrisons CEO Dalton Philips this week defended the UK retailer's "fresh format" stores and its policy on vouchers, two strategies brought into question in recent weeks.

Some City analysts have argued the fresh format stores, outlets with more space for fresh and chilled food, have disenfranchised Morrisons' core customers.

Morrisons' reluctance to offer consumers promotional vouchers on groceries has also been noted, especially with Tesco stepping up its activity and Sainsbury's use of its Brand Match scheme.

However, speaking to reporters after Morrisons reported a mixed set of half-year results that included a dip in like-for-like sales, Philips stood by the retailer's strategies.

He said the fresh format stores were a "great concept" where sales and customer numbers were growing and denied Morrisons' core customers were looking elsewhere.

"There is absolutely evidence that those stores in general are increasing like-for-likes by between four and six per cent versus last year and the same for their customer count. In this market, to be talking 4-6% sales increase is big," he said.

Morrisons is also to introduce larger and more consistent unit pricing to help customers choose the best deal from different products.

The change in pricing will help customers to directly compare the prices of small and large packs and items that are at a promotion price with those at a standard price.

The changes will start now and finish rolling-out by the end of 2013 and will see most products labelled with a price per kilogram (for solids) or the price per litre (for liquids).

Dalton Philips, Chief Executive of Morrisons, said: “For too long, retailers have not given customers enough information to easily compare prices. By doing this we believe we can restore trust in supermarket prices.”

Morrisons has been in talks with consumer champion Which? to understand the changes it thinks are necessary for customers to make easier choices.

Although customers will notice some changes in a matter of weeks, many will not all be evident until the end of 2013. Some 30,000 prices will have to be changed in the average store, and in the case of pre-packed food some manufacturing processes will have to be changed and this will take time.

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