Supermarket Morrisons must change to survive, says top retail analyst

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Bruno Monteyne, a retail analyst at Bernstein and former Tesco director, warned: “Morrisons is the only retailer who potentially may find out the UK has moved on and there is no more need for it.

“Morrisons can’t simply go back to the old days. Its historical place has been taken by the discounters.

“It does not yet know what it can offer UK consumers that is a valid alternative and sufficiently different from Asda and the discounters. Morrisons is a round peg in search of a square hole.”

The analyst’s comments sent the shares down 2.7% to 193.2p as the hunt for a new chief executive intensified.


Odds on favourite is David Potts, Tesco’s former Asia chief executive, with Matthew Barnes, Aldi managing director, and Richard Brasher, former Tesco UK boss also in the running.

Monteyne suggested it was wrong that retail analysts had not changed their predictions on future profits for the UK’s fourth-biggest supermarket, despite downgrades from the same analysts at rival listed supermarkets Tesco and Sainsbury’s.

He wrote: “The argument that ‘Dalton Philips [the outgoing chief executive] called it early with the right plan and therefore the consensus adjustments last March were sufficient’ doesn’t stack up… Morrisons doesn’t really know where it is headed.”

Meanwhile Ikea revealed that its total net income hit €3.3 billion (£2.5 billion) in 2014, with retail sales rising 5.9% to €28.7 billion.

Germany, the United States, France, Russia and the UK were the best performers.

The frontrunners for Morrisons’ top job

David Potts: He helped to turn Tesco’s Far-East venture into a success and has worked with chairman Andy Higginson.

Matthew Barnes: He has enjoyed success as joint managing director of Aldi.

John Browett: The Monsoon boss worked with Higginson at Tesco and was successful at Dixons.

Darren Blackhurst: He was once boss of Matalan and also has previous Tesco and Asda experience.

Richard Brasher: A former Tesco UK boss with close ties to Higginson, who was finance director at the time.

John Dixon: He is marks & Spencer’s director of general merchandise. He previously ran the food division and may be getting itchy feet.

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January 29, 2015 |
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