Morrisons has pledged to offer independent retailers who join its Morrisons Daily franchise fairer margins and support to offset declining categories.
The supermarket has nearly 500 Daily stores, with recent expansion boosted by the acquisition of several high-profile independent retailers.
Speaking to Better Retailing about the support offered to its retailers, Morrisons wholesale director Paul Dobson said: “Alongside general product inflation coming through, pretty much all our retailers are facing extraordinary costs and they’re asking how to prepare their businesses once any government support ends.
“We constantly monitor what our retailers make, and in the long term, we grow that where we can. What we have to do is keep a tight control over it.
“One of the strengths we can offer is competitive pricing. We’re ensuring retailers represent Morrisons value and have a sensible margin to run their businesses.”
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Dobson added that the company was focusing on fresh and food to go categories for growth. He said: “We need to be able to represent the Morrisons brand and add a reasonable amount of fresh food and grocery in particular.
“Looking ahead at declining tobacco numbers and declining alcohol volumes in the long term, adding fresh food and grocery sales is really good for a store’s sustainability.”
Morrisons Daily franchisees also have access to 1,400 own-label products, helping them cater to changing demands of customers. Dobson said: “That starts with ‘Best’ and we see that expanding. We’ll do more ranging tailored to certain demographics. Affluent areas can make greater use of Best.
Morrisons looks to fresh and food-to-go for Daily franchise growth
“Within the mid-tier, we have a number of other organic and free-from brands, such as Plant Revolution, Nourish and Little Kitchen. There’s a number of internal brands, which will increase, and if a store has a particular need, we can curate ranges around that.”
Asked about the criteria for joining Morrisons Daily, Dobson said: “We want to work with capable retailers. We have a 120-year-old brand and it’s important that we protect it. There’s a lot of strength and value for our retailers. We will spend time getting to know our prospective customers and time in their stores.
“It is important we work with capable and experienced retailers. At the moment we focus on stores of 1,000sq ft or above, but it depends on ranging space. There’s no hard rule.” Dobson added that while the multiple has ambitions to grow Daily stores to 1,000, this was a longer-term target as the company is prioritising finding the “right” retailers to join the brand.
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