Morrisons: A lesson learnt

For Morrisons 2011 was, in part, about convenience. As a supermarket group, it was late to the game and the first two c-stores that it opened in Ilkely and Wilmslow were subject to close press scrutiny in consequence, generally receiving the thumbs up. The question was how would the format develop and would the two pilots become the template for a more general roll-out?

As we near the end of February 2012, the answer to those questions is still far from clear. What is apparent is that another piece in the Morrisons convenience jigsaw has been slotted into place with the opening, last month, of a c-store in central Manchester aimed at students.

This shop is bigger than its two nearest relatives and there is a stronger emphasis on food-to-go and value-led offers, both of which should appeal to the hungry and generally impecunious student body.

Think local

A little context setting is essential with this store before any further general description, however. The 4,300 sq ft M Local store is directly around the corner from a Sainsbury’s Local and a Costa Coffee branch. And a couple of hundred metres beyond this lies the bulk of Manchester University, a daily point of convergence for many thousands of young people.

Given this, it would be fair to imagine that competition for the student spend in the area would be fierce. Equally, you might think that any retailer setting up shop in this neck of the woods would be bending over backwards to provide for low-spending but frequent shoppers, who will top up on an almost daily basis on the way to and from lectures. It is also worth noting that in the other direction is central Manchester’s main hospital – again meaning that small basket sizes are likely to be the order of the day, and ‘Get well soon’ cards assume an unnatural importance for local retailers.

Yet the Sainsbury’s Local in this location looks almost like any other and it would be fair to say that little has been done to accommodate local idiosyncrasies in terms of layout or ranging. And this perhaps is where being late to the convenience arena may pay dividends for Morrisons, according to concept development manager Mark Hayward: “With no disrespect, there are Tesco and Sainsbury’s convenience stores everywhere and they’ve reached the stage where it’s about format roll-out. For us, it’s still about development and seeing how we can flex what has been done in Wilmslow.”

He says that from the outside, this store is all about “vision”. Practically, what this means is that as you stand across the street from the shop, a very long glass frontage provides views deep into the interior. “It’s all about being able to see to the back wall and making it feel welcoming,” says Hayward.

It’s also about a store that is brightly lit and feels fresh with lowish units that permit the views referred to by Hayward, rather than the towering fixtures in the Sainsbury’s Local. Walking into this store, the first thing that is apparent is that it is filled, to an overwhelming degree with students. It is clear that Morrisons has hit the ground running with this one and it is not difficult to understand the appeal.

Food on the move

For a start there is the back wall. You can see this from almost any point in the store and the combination of bright orange with the vivid green of the rest of the shop, is immediately eye-catching.

By their very nature, students tend to be grazers, rather than food planners and therefore providing a beacon of this kind for the food-to-go part of the offer makes good commercial sense. And whether you want porridge at £1 a shot, a cup of soup or perhaps a bacon bap, all is on hand.

Hayward points out that the pastry section is double the size of the other two convenience stores and that fresh food sales in the store account for 56% of the total, against a company average of 48% – confirming perhaps that this is more of a grab-and-go store, than a freezer-filling branch.

Perhaps with this in mind, four self-scan tills have also been included as part of the store’s blueprint, alongside five that are manned. Self-scanning was absent in Ilkely and Wilmslow and this again indicates a store where high footfall and smaller basket size is the order of the day.

And then there is the booze. As a distinct demographic cohort, students continue to live up to their reputation as enthusiastic topers and this store seeks to cater for the predilection. A large beers, wines and spirits section at the far end of the shop has a freestanding circular unit offering bottles of wine for under a fiver – entirely on student brand.

The other point about being a student is that when you’ve paid the bar bills, there’s not always a lot of money left to feed yourself. With this in mind, a significant amount of space is devoted to the recently launched Morrisons Savers range – meaning that a can of baked beans, for instance, can be yours for 38p.

Work in progress

M Local on Grafton Street then is the latest iteration of a format that is still a work in progress. The Morrisons store development and marketing team continue to work with Fitch on the proposition and the in-store graphics make getting to where you need to be pretty straightforward.

It is also about value engineering. Hayward says that part of moving ahead from Ilkely and Wilmslow has been about creating store interiors that are not “gold-plated” and which are a realistic proposition as far as roll-out is concerned.

A couple of points remain to be addressed, however. Manchester city centre is a busy place and at certain points during the day can be synonymous with traffic jams. Part of being a convenience store that relies heavily on fresh food sales for its bread and butter, as it were, is that very regular replenishment has to form part of the logistical effort.

A source close to the retailer comments that this may be proving an issue at the Manchester store. But the same, presumably, must hold true for other competitors in the vicinity. The other point is who knows when students finally decide that now is a good time to get out of bed and head for the halls of learning? Trading patterns are likely to show a certain unpredictability as a result.

In terms of both appearance and offer, this is a good store and does represent new thinking when set against its rivals. It also gives Morrisons options when it comes to opening future convenience outlets.

Doncaster and Birmingham New Street are slated to become M Local destinations later this year and if they’re anything like as good as this one, then the existing convenience incumbents will have a problem on their hands.

First mover advantage is one thing, but learning lessons from others may still pay dividends for late arrivals at the convenience store retailers’ ball.