Morrisons thinks smaller - and HMV sales get smaller

The supermarket finally moves into convenience stores - while HMV sales take a turn for the worse...

by Emma Haslett
Last Updated: 06 Nov 2012
Eee by gum: it looks like everyone’s favourite northern grocer, Morrisons has finally caught on to this new-fangled interweb thingy. The supermarket, which has just announced an impressive pre-tax profit, says it’s planning to launch online shopping next year, as well as trialling convenience stores. It’s the last of the ‘big four’ supermarkets to launch an online offering, while the likes of Tesco and Sainsbury are way ahead when it comes to smaller shops. But CEO Dalton Philips insists it can make up for lost time – and given the inroads Morrisons has managed to make on its rivals in recent years, he may be right…
 
The figures announced by Morrisons today were an impressive upturn from last quarter, with a half-yearly pre-tax profit of £410m (up from £359m). In May, the company admitted sales had slowed after it struggled with low commodity prices and the ‘virtual elimination of food inflation’ – but it seems to have bounced back.
 
Despite last quarter’s dodgy results, Morrisons has enjoyed solid growth during the course of the downturn. Many retail observers put this down to the fact that it kept a tight control over costs – and its lack of enthusiasm for online shopping (and all its associated costs and overheads) was seen as a good example of this. So today’s revelation that it’s planning to launch a web offering – as well as trialling convenience stores for the first time – represents quite a turnaround, strategy-wise. Clearly it’s feeling confident that it can translate its large-store success into different formats.
 
But while the northerners are flourishing, representatives of the South aren’t doing quite so well. Retailer HMV said today that sales in the UK and Ireland fell 10.6% this quarter, which the company put down to the World Cup (possibly fair enough – but at some point soon, someone is going to have to draw a line under what can be blamed on England’s dire performance). Not the best news for the company – but its CEO Simon Fox remains chipper, saying that a new focus on live events, books and games could mean the Christmas period is more successful.

The company is even planning to launch its own festivals in 2011. Although if the wait MT experienced at HMV’s tills recently is anything to go by, we wouldn’t fancy the queue for the toilets…

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