Morrisons reveals plans to take on rivals

The new boss of Morrisons said today that he was looking at new ways for the supermarket to take on its larger rivals Tesco, Sainsbury's and Asda – and he is planning trials of conveniences stores and internet home shopping next year.

Dalton Philips, hired from Canada to run the Bradford-based business, also said he would be using four stores as test "labs" to experiment with layouts and edited ranges to free up space for more profitable non-food stock such as clothing and homewares in existing stores.

On top of that, he said there would be eight "major trials" in stores, including fruit bars and takeaway meal counters. "We are the fourth largest retailer in the country and if you are not going to be the biggest you are going to have to be the fastest," said Philips, who joined from Canadian grocer Loblaws earlier this year.

The changes are a break with the past for the traditional retailer, built by Sir Ken Morrison – who stubbornly refused to consider anything other than big-box supermarkets and dismissed home delivery as something he had done on his bike as a young man.

Philips said Morrisons would tackle the internet and convenience markets in 2011 but declined to say anything other than that three convenience stores were planned. He dodged the question of what internet model Morrisons would use – there is currently a furious debate over the merits of picking from a central warehouse as Ocado does or from stores like Tesco – but stressed that whatever the model, it would have to be a profitable one. "If you end up subsidising your online shoppers by making your core shoppers pay more, that's a fool's game," said Philips.

The strategic update came as Morrisons reported a 14% rise in first-half profits to £410m on sales of £8.1bn. Total sales increased 9.1% in the six months to 1 August.

Source : Zoe Wood - Guardian.co.uk