Morrisons plans to grow its M-local convenience chain to 500 stores in the next five years.
Speaking at the IGD Convenience Retailing conference on 21 November 2013, Gordon Mowat, convenience managing director at Morrisons, said the supermarket had ambitious growth plans: “My boss – ceo – is a relatively demanding character and is not going to expect anything less [but] at least a 500 convenience store business over the next five years.”
Expansion will enable Morrisons to reap the benefits of distribution, said Mowat.
“Distribution is all about scale – seeing the benefit of the model. We are on a journey.”
Full shop in a convenience store
Mowat said consumers were shopping more conveniently and expect to get what they get from a main shop in a c-store.
“Customers are looking to do a full shop in convenience therefore we need a compelling fresh offer,” he said.
Mowat said Morrisons aimed to build on its differences, such as fresh foods and provenance, within convenience.
In Morrisons M-local stores 50% of space is dedicated to fresh. The supermarket’s own butchers prepare its fresh meat and fish, and flowers are also freshly prepared for c-stores, for example.
Service and value for money, are also key.
“Customers know they are paying more in c-stores and they don’t mind paying more but you need be wary of that as discounters become more prevalent,” Mowat said.
Mowat said 2013 had been a “big year for us” in terms of store acquisitions – Morrisons will have grown its convenience chain from 12 to 100 stores by the year end.
Mowat urged suppliers to “think small” in their relationships with smaller stores with supplier “asks” rather than “bashing”.
Most NPD is supermarket focused, he said. “Can you do some stuff for the small guys?” he asked.
A growing £35bn convenience market also warrants more supplier team support, he said. “There are multiple channels which customers are shopping across.”
Channel insight could be enhanced too, according to Mowat. ”Most of the data is main shop insight not top-up,” he said.
“We need more customer understanding brought to the table. There is an opportunity for suppliers to step up in the convenience space – to bring the right range and right proposition forward.
“But what’s put in needs to be driven by the customer. There’s a lot to do and an awful lot that we can improve but as a joint effort.”