Commercial property supermarket chain Morrisons has fired the starting gun on expansion in the south, defying market trends against space increases.
The Bradford-based grocer said two thirds of its 2.5m sq. ft. expansion drive, which started last March and continues to run for three years will be in the south of England, especially around the London area.
Commercial property store Morrisons, which has nearly 500 stores, is underrepresented in the south of England and believes its Fresh Format store design, allows it to cater to a more affluent consumer without isolating its core market.
Retail-Week.com revealed in March that Morrisons’ re-opened Fresh Format commercial property store in Tunbridge Wells is seen as an indication in attracting new customers.
Dalton Philips, Chief Executive said that there were significant opportunities for progression without cannibalising sales and indications from Sainsbury’s and Tesco that store expansion would slow down would not be echoed by commercial property grocer Morrisons.
Philips said: “We are going to be food focusses, not a generalist. We believe that UK grocery has got very functional, which is not what we’re doing.
“Our new format allows us to see how we perform with different demographics, you will always go on tweaking the format but we have an offer that really travels in the south.”
He further added: “If we have our fair share of market share in London, it would be another £1bn of sales. It’s a very attractive market for us.”
Philips countered the argument that the format, of which there will be 43 commercial property stores open by the end of the week, could alienate its core customer claiming the format “shouts value” and is performing well in less affluent areas.
Commercial property chain Morrisons will reach two million of the six million customers not currently within a 15 minute drive of the grocer in the next three years.
Meanwhile the company has given the strongest indication yet that it is considering a move into the online channel of retailing. It would join commercial property stores Ocado and Tesco as an avenue of food shopping over the internet and comes at a time where it need a bit of a overhaul of its operations.
Both Asda and Sainsbury’s supermarkets have made inroads into the market share of nation front-runners Tesco in recent months, while commercial property chain Morrisons has remained largely stagnant. A move into online retailing as well as a revealed intention to open more commercial property stores in the south of England suggests that the company is taking a hands-on approach to the situation, even with the lack of flexibility among consumers’ purses at present.
