Morrisons has been one of the grocery success stories of 2008, and winning The Grocer's Gold Award for the Grocer of the Year 2008 was the icing on the cake.
Just before it was given the award, the multiple announced like-for-like sales growth of 7% for the first three months of 2008 and that its customer numbers had hit 10 million for the first time.
The company has also become the only major UK supermarket group with 100% British fresh pork, beef, lamb and poultry; and has cut 2,000 prices across its product range in recent weeks. It has also worked to tailor its ranges to each store's local demographic.
Now that the firm's programme of store refits has completed, and 8,000 lines have been launched or revamped, the multiple is riding high and the time seems right to ask what Morrisons' secret is.
It is often beaten on price by Tesco and Asda, but regularly appears in The Grocer 33's top spot for availability, although it was pipped to the post by Asda for the availability gong at the Gold Awards this year. However, Morrisons actually recorded more full baskets than Asda.
Morrisons' back-to-basics approach - which essentially means the classic grocery virtues of friendly service; cheap goods where you want them, when you want them; and an increasing focus on fresh food - should help the firm ride out the credit crunch easier than some.
The disarmingly straightforward attitude to getting the basics right in store, avoiding add-ons such as banking and insurance, and concentrating on value food ranges, may also be the key to Morrisons' success on availability.
Rather than complex IT-based stock checking, Morrisons' approach to availability means staff checking stock levels manually every day, although they do check off items using electronic order pads listing everything that should be on shelf in each aisle. This 'physical' method has great benefits where a dedicated team is present, but it relies on the discipline that can only be ensured by dedicated store managers.
The turnaround time for getting stock in is also speedy, with more often than not next-day delivery thanks to Morrisons' own fleet of lorries and its network of depots and packhouses. A new depot that opened in Swindon last year serving the south and west has been invaluable in keeping availability up to keep those former Safeway customers happy.
And notwithstanding the challenge posed by the Market Street format meaning there are several "shops within a shop", the company is focusing on ensuring its stores offer a uniform level of quality.
In fact the empowerment created by Market Street helps to make staff feel more responsible for maintaining standards instore, a trait that has been "bred in Morrisons for many years", says Eva Wallace, duty manager at the Livingston store.
She admits that the level of responsibility given, as well as the commitment to offering the same standards all-day long, is "challenging" for staff, but says it "makes sure customers come back".
Manager of the Newquay branch Steve Gale believes pride among the staff in his store is the key to maintaining standards.
"We have always prided ourselves on being the best store in the region in terms of product range and availability," he says.
"Morrisons has given us an even greater advantage in these terms due to ranges, availability and being able to produce so many products fresh in store. The fact that we have more people preparing fresh food in-store than any other retailer means we have more ownership over our range and can prepare extra when we go through a busy period."
Disciplined merchandising instore, including PoS strategies, has enabled Morrisons to squeeze the greatest possible revenue out of its shelves over the past year, and particularly over Christmas.
Suppliers have noticed how Morrisons' attention to executing promotional strategies has benefitted categories.
Mars' trade relations manager Bep Sandhu said Morrisons had been the "star performer" in grocery. "A lot of that was driven by execution instore," she adds.
Mike Garner of Merchandising Sales Force, which handles all of Morrisons' instore sampling needs, says the firm works closely with branch managers to ensure product is on shelf during sampling and in the week after.
"Once a promotion is agreed, we work heavily with the brands on PoS clarity and availability," he says.
His managers typically go into a store on a Monday, Tuesday and Wednesday to ensure availability is right for the coming weekend following a launch.
The new Grocer of the Year was praised by the Gold Awards judges for the success of its stores' refresh programme and its fresh food Market Street offering, but the bottom line is that turnover grew by 4.1% to £13bn year-on-year over 2007-2008 (even accounting for a 53-week year in 2006-07). This growth was "broad-based, across all regions", says the firm.
With the darker days of the Safeway conversions in 2004 now far behind it, the future looks bright for Morrisons.
However impressive your ranging and merchandising, if you're not getting your turnover due to products not being on shelf, you're not doing the job right. Morrisons may just have the answers.n
sharing our vision
How do you encourage and motivate your team on maintaining availability?
We share with the entire store team our vision as a business and our values for how we will all work together. This has allowed us to share with the team how we are doing. as well as gain valuable feedback form them. All of this has helped re-inforce the sense of pride in our store.
Can you describe one challenge you've overcome recently in meeting demand?
With our extension and refit now complete, we have bought in several new ranges to increase the offering to our customers. One range, which has proved particularly popular, is the At Home range of non-food. We identified that demand was high and, with the support of the buying team at head office and our colleagues in distribution, we were able to get additional stock into the store very quickly. This has meant we will be receiving an additional delivery each week to ensure we maintain availability.
Has Morrisons' high-profile success benefitted team motivation on availability?
The success our business is experiencing is great news for everyone. We have recruited additional colleagues to help support the additional volume we are selling. These recruits have been well received into the business and our existing team is bringing them into the Morrisons fold. The team has also enjoyed having positive press about our business, as they always believed we were doing far better than was perceived.
Has the number of customer complaints about the price of goods increased recently?
