Analysis: A look at Dalton Philips' legacy at Morrisons

Speaking to journalists today he said: “You make decisions that you’re proud of, and you make some decisions you regret.” Here, Retail Week looks at some of those decisions and the legacy he will be leaving behind at Morrisons.

A relative unknown

Phillips joined the retailer as a relative unknown, despite solid experience as chief operating officer of Canadian grocer Loblaw. He was a former chief executive of Irish department store business Brown Thomas and held a variety of senior roles at Walmart’s international division.

At the time, his appointment was well received with City analysts describing him as an “inspired” choice, with his experience in online, non-food and loyalty, attributes the retailer was lacking in early 2010.

The misty veg years

Morrisons ramped up its focus on innovation with a more sophisticated product offer and the much maligned misty fruit and vegetables. While it maintained its price positioning, critics argued that Morrisons alienated its core Northern customers by pushing upmarket, rather than focusing on price, as discounters Aldi and Lidl continued to steal market share.

The grocer also heralded its expansion into non-food with the launch of a family clothing brand called Nutmeg.

Philips worked to free up space by rationalising its offer, highlighting how at the start of the process the retailer offered 16 different kinds of balsamic vinegar.

Convenience

In late 2012, the retailer announced plans to open convenience stores after a successful trial of the M Local format. It initially planned to open 20 stores by the end of 2012, and a further 50 in 2013. It then doubled its store opening target for 2013, after striking a deal to buy 49 former Blockbuster shops.

Online

Joining the fray in January 2014, Morrisons was the last of the big four grocers to enter the online market through a partnership with Ocado.

The Ocado partnership wasn’t the retailer’s first stab at ecommerce, after taking a stake in US online grocery operator Fresh Direct in 2011. Te stake was bought to help Morrisons learn about how it would develop its own online offer.

Morrisons said it would sell its 10% stake in Fresh Direct as part of restructuring plans unveiled in March.

Loyalty

Morrisons unveiled its loyalty card scheme in October 2014 in an effort to gain lost ground. Match & More awards points equivalent to the difference on price on items that are cheaper in other supermarkets.

It was the first scheme to provide a price match guarantee against discount chains Aldi and Lidl, as well as Tesco, Sainsbury’s and Asda.

Kiddicare

Morrisons acquired online baby goods specialist Kiddicare for £70m in 2011 and sold it to Endless for £2m in July 2014.

It planned to use the acquisition to build its non-food business and give it a platform to kick-start its online operation. Under Morrisons’ ownership, Kiddicare opened 10 bricks-and-mortar stores in former Best Buy locations, which many believed was ill-judged.

Criticism mounts

In June last year, Philips was slammed by Sir Ken Morrison, who described Philips’ presentation at the grocer’s last AGM as “bullshit”. The comments were made as Sir Ken asked numerous questions about the business and how it was progressing.

Outgoing chairman Sir Ian Gibson said he would reply to Sir Ken by letter. People present at the AGM said it was a “bruising” occasion when strategic differences between Morrison family members and the board were angrily aired.