Morrisons advertising & marketing assignments

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Morrisons became the UK's #4 supermarket retailer in 2004 as a result of the acquisition of larger rival Safeway. That deal elevated what had previously been a regional company into a national player alongside Tesco, Asda and Sainsbury. Originally an offshoot of the US group of the same name, Safeway was established as an independent company in 1987. Its fortunes were bumpy to say the least over the next ten years, but the group finally found its feet in 2001 with an emphasis on fresh food and aggressive pricing. In a bold move to become a national operator, regional group Morrisons agreed to acquire Safeway despite fierce competition from a number of other, more powerful buyers. Yet integration of the two businesses proved far more difficult than Morrisons had anticipated, forcing the group to issue an almost unprecedented total of five profit warnings in just the first six months of 2005. Morrisons was back on track by the end of 2006, and delivered strong growth through the subsequent economic downturn. However, trading has been rather more challenging since Christmas 2012, not least as a result of expansion by discounters Aldi and Lidl. There is no significant threat just yet to Morrisons' position among the Big Four but the market remains challenging. Morrisons has around 10% of the UK groceries market, around 5 points behind Sainsbury's and 2 points ahead of Aldi. Unlike other major supermarket groups, Morrisons processes and packs the majority of the fresh food it sells inhouse, and almost all of its fresh meat is sourced in Britain. The group's main private label is Farmers Boy, used across a variety of prepared meals, cooked meats and dairy products, supported by premium brand The Best. Nutmeg is the store's private label clothing and accessories brand. The group has widened its coverage through wholesale partnerships with Amazon and food delivery service Ocado. It also resurrected the Safeway brand for private label products which it wholesales to independent convenience stores including McColl's. In 2019, Morrisons operated from 495 stores nationally. Revenues for the year to Feb 2020 were £17.5bn with net profit of £348m. David Potts is CEO.

Capsule checked 27th March 2020

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Adbrands Daily Update 31st Mar 2020: UK supermarkets are one of the few market sectors enjoying boom trading under lockdown, although there are also significantly higher costs associated with managing staffing and the supply chain. According to latest figures from Kantar Worldpanel, grocery sales during March reached their highest ever level of £10.8bn in just four weeks, with all ten chains enjoying significant year-on-year lifts in till roll ranging from 4.6% at Morrisons to 17.6% at Lidl. As that range suggests, the rate of growth has been very mixed, with discounters Lidl and Aldi enjoying by far the biggest surges. Aldi achieved a new record market share of 8.2% while Lidl was at 6.1%. Market leader Tesco, on the other hand, also enjoyed a significant uplift in till roll and remains more than 10 points ahead of closest rival Sainsbury's, but its share of the market slipped to a new multi-year low of 26.8%. The convenience store sector has also done well out of the shopping surge, with some customers choosing to avoid the longer queues found at big supermarkets. However, these smaller outlets also face a greater risk of staffing shortages if infection rates grow. The Co-op has already closed ten of its 2,500 stores and is considering closure of 60 more. Chief executive Steve Murrells told ThisIsMoney "As lockdown really takes hold, there most definitely will be areas [where we have to close stores]. This could either be due to self-isolation of colleagues, or where customers just aren't using a store. What's critical is that we get replacement labour and help to keep other stores open and keep the country going through this."

Adbrands Weekly Update 5th July 2018: Ads of the Week: "What We Make". Well, well, well. We weren't expecting this. Here's a really superb spot from Publicis London for British supermarket Morrisons, the smallest of the country's Big Four grocers. In some respects, it might actually be one of the best ads we've ever seen for any supermarket in its stripped-down simplicity and its emotional impact. It also highlights Morrisons' main USP over its rivals: the store still produces, processes and packs most of its fresh food inhouse rather than farm it out to third-party suppliers. In the South of England, many shoppers still tend to look down on Morrisons because of its Northern roots, and instead favour local heroes Sainsbury's and Tesco. This ad should make many of those supermarket snobs think twice about that view. 

Adbrands Weekly Update 12th Jan 2017: Unlike their US counterparts, who mostly suffered a grim holiday trading season, several British physical retailers reported solid performance over Christmas and the New Year. Perhaps the biggest surprise was a rise in apparel sales at Marks & Spencer, for only the second time in 23 quarters. Like for like sales of general merchandise rose 2.3% in the quarter to December, compared to a 5.8% decline in the year-ago period. However M&S warned that the uplift may not hold in the current quarter because of sales and a late Easter. Sainsbury's claimed a "record" Christmas week, helped by the contribution from newly acquired Argos, and better than expected trading over the holiday period. Despite widespread price cuts, its like for like supermarket sales were up marginally, whereas a decline had been forecast. Tesco too was up, by almost 2%, and Morrisons reported its best Christmas for seven years, with a near-3% uplift in November and December. Aldi did even better with a claimed 15% increase in December alone.

Adbrands Weekly Update 24th Nov 2016: UK supermarket Morrisons is to resurrect the Safeway brand as the umbrella for hundreds of new private label fresh and shelf-stable food products. These will not be sold in Morrisons' own stores, but made available to independent retailers, especially convenience stores, through wholesale channels. Morrisons has itself largely exited the convenience sector, but sees an opportunity "to leverage its sourcing and unique food maker skills to give independent retailers' customers access to great quality products". Morrisons already has one of the biggest inhouse food manufacturing networks of any of the major supermarkets. It processes and packs the majority of its own fresh food inhouse, whereas competitors tend to contract out those services. The project also offers Morrisons a chance to exorcise bad memories associated with the Safeway brand. The 2003 acquisition of what was then the separate Safeway supermarkets business elevated Morrisons from a regional retailer into one of the Big Four national supermarkets, but the struggles involved in integrating the two businesses created years of poor trading and management turbulence.

Adbrands Weekly Update 7th July 2016: Another UK retailer has entered administration with the collapse of My Local, the convenience store chain founded earlier this year by the spin-off of supermarket group Morrisons' smaller outlet. Around three-quarters of the chain's 125 stores have closed, with 32 still open pending a hoped-for sale. Though it no longer owns the business, Morrisons has pledged to take back staff from closed outlets or help to find them work with rival supermarkets.

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