Morrisons: Five Mistakes Behind Its Troubles

As Morrisons confirms another period of falling sales and profits, we ask what mistakes it has made to help account for the chain's troubles:

:: Losing Touch With Its Roots

Since William Morrison started his Bradford market stall selling eggs and butter in 1899, Morrisons has grown its brand on the back of two central themes; value and service.

It was a rapidly expanding family business and spread its supermarkets nationwide before joining the FTSE 100 in 2001.

Its problems largely surfaced after it bought Safeway, leading to a costly and troubled integration into the Morrisons family.

As the no-nonsense Sir Ken Morrison stepped down as chairman in 2008, Morrisons started to feel the effects of the financial crisis so it moved to attract more affluent customers and was accused of neglecting the lower end of the market and therefore its core customer base.

:: Pricing Policy

Morrisons found the 'move to the middle' problematic. It was crowded.

The chain prides itself on having a unique selling point: its own meat and farming operations and it emerged unscathed from the horsemeat scandal which gripped the wider food industry.

But while it was able to tackle rivals in the sector on quality, its more ethical approach has failed to win over customers on a budget in recent years who have been shopping around at hard discounters and putting price first.

:: Late To Convenience Market

Morrisons - under the leadership of Dalton Philips - embarks on a bid to enter the convenience market in 2011.

Tesco already has more than 1,000 small high street sites.

Unfortunately, many of the best locations are in the hands of rivals, and Morrisons' decision to buy 49 failed Blockbuster stores proves expensive.

Morrisons announced on Wednesday that it was selling its portfolio of M Local stores at a loss of £30m.

:: Late To Online Offering

It was not until 2013 that Morrisons launched its online fresh food offering, in partnership with Ocado. It was a whole 14 years behind biggest rival, Tesco.

The UK online food market is forecast to grow to £14.6bn by 2018 and has proved an important tool in maintaining market share.

:: Customer Experience

Like Tesco, Morrisons has struggled to achieve satisfaction among its shoppers. Many have defected to discounters in recent years, basing their decisions on the overall experience as well as on price.

Complaints ranged from too few till operators to basics such as poor staff engagement.

Remember the 'misty veg' sections? The gimmick brought in to bolster the look of its fresh vegetable sections became something of a laughing stock and was removed quickly by David Potts when he became chief executive.

He has embarked on a bold programme to turnaround these problems, hiring thousands more store staff and slashing costs in the process.