This week marks a year since Morrisons boss Rami Baitiéh took the reins of the supermarket and many changes have been made.
Baitiéh, who spent 20 years at French grocery giant Carrefour before heading to Bradford last year, says it has been “an incredibly fulfilling year, made possible by the dedication of our colleagues and suppliers and the loyalty of our customers. I’ve enjoyed every single day”.
“Together, we’ve achieved so much, and I’m excited to see what the next year will bring as we continue to grow this great British business,” he says.
The CEO, who cites fast turnarounds, cultural, organisational and digital change as his key skills, has certainly had a busy 12 months, and his some of the bold moves already made have off.
Morrisons’ balance sheet is starting to look healthier, and the latest Kantar grocery market share data shows that its sales grew by 2.4% in the 12 weeks to 3 November, the first time it has outpaced the market average growth since June 2021.
Retail Gazette looks at some of the biggest changes made by Baitiéh in his first year in charge.
Selling off property to cut debt
Morrisons was left with a sizeable debt pile following CD&R’s near £10bn acquisition of the grocer in 2021.
Observers believe this debt has left it unable to invest as deeply as its rivals in value in a highly inflationary market where price has been top of mind for many shoppers, hitting Morrisons competitiveness.
However, in late September, the retailer revealed it would wipe £331m off that bill after it sold the ground leases on 76 of its supermarkets to investor Song Capital.
If follows Morrisons’ disposal of its forecourt business to CD&R stablemate MFG earlier this year for £2.5bn. The deal included 337 of its petrol stations and 400 associated sites in the grocer’s car parks.
If the proceeds from the transaction is used to reduce debt, the supermarket would have cut its pile by 41% to £3.6bn.
Listening to customers
A key tenet of Baitiéh’s turnaround plan has been listening to customers.
When he joined the retailer, he said that “listening to customers and colleagues will show (us) the way,” as he sought to “reinvigorate, refresh and strengthen” the retailer.
Morrisons now invites customers to join its management meetings and hosts monthly customer roundtables in stores to gain insights on how it could improve.
The customer panels asked questions about pricing, products and service, and will be able to ask management questions.
Additionally, Baitiéh said that the thoughts of its store managers would also be prioritised within the company, noting that all shops would hold monthly shopper roundtables, with those that were particularly “challenged” holding them weekly.
More loyalty scheme revamp
The decision to relaunch Morrisons More Card and push into member pricing may have been made pre-Baitiéh’s arrival, but the new CEO has pushed ahead with “significant investment” in the loyalty scheme.
In August and September, Morrisons launched a rolling programme of over 2,000 More Card prices, which group marketing director Alex Rogerson said represented its “single biggest investment in loyalty and pricing for many years”.
The grocer further extended the breadth of the loyalty scheme by introducing More Card points on both its Amazon channel and in its convenience stores.
Morrisons also plans to increase the use of “hyper-personalised” offers for More members following a My Points Boosters scheme in April, which allowed users to choose up to 10 brands from a personalised list of favourite products.
Baitiéh told suppliers that he planned to increase the number of transactions involving the loyalty scheme from 50% to 70%.
Improving availability
When talking to customers, Morrisons found that alongside loyalty, availability was what they talked about the most so it vowed to focus “intensively” on these areas.
In a bid to improve its patch availability, Morrisons has installed thousands of AI-powered cameras across its UK stores after trials found they boosted availability and increased staff efficiency.
Morrisons has seen significant rises in availability scores in stores where the technology has been tested, suggesting that it could free up staff to prioritise customer service, which is another crucial focus for Baitiéh.
The grocer became the first UK retailer to integrate US technology, teaming up with Seattle-based AI company Focal Systems.
The cameras provide real-time on-shelf data and automatically direct staff to where stocks are running low.
Investing in value
Morrisons has made moves to better compete on value under Baitiéh.
Alongside the price cuts for More Card members, Morrisons also launched its Aldi and Lidl Price Match in February, which the CEO said had “a great start and is giving customers increasing confidence in the competitiveness of our prices across the shop”.
The supermarket is matching the cost of over 200 products from the discounters including corn flakes, canned tomatoes, baby wipes, rice and bread as well as household cleaning products such as anti-bac spray, bleach and toilet rolls with those at the discounters.
Morrisons said it was also continuing its commitment to British Farming with 100% British beef mince, chicken fillets, semi-skimmed milk and carrots all included in the Price Match.
The grocer has introduced signage across its stores and online to show customers the best selling weekly essentials that are price matched to either Aldi or Lidl “depending on whichever is cheaper”.
Leadership school
Baitiéh established The Sir Ken Morrison Leadership School, named after the supermarket’s former chairman, in July to help equip staff with the skills to advance their careers.
The grocer said the school was set up to reflect the “innovative and hard-working spirit” held by Sir Ken, as well as that it sought out in its staff.
Leadership and technical training is included in the school, which runs three times a year and has roughly 70 in each cohort, with the class required to sit an exam and carry out a business-relevant project. The participants will receive guidance from mentors, including current Morrisons chair Sir Terry Leahy.
Baitiéh told investors: “Our leadership school, an important investment in our future…Each cohort has a mentor, and I was so pleased that our chairman agreed to be the very first mentor.”
“Having Sir Terry Leahy as your mentor at leadership school is a bit like having Roger Federer as your tennis coach – amazing.”
The supermarket will work with graduates of the programme, with the aim of promoting them to their next step within six months.
Convenience store expansion
In June, Baitiéh revaled that Morrisons was looking to open a further 400 convenience stores as it looks to grow its portfolio to 2,000 by 2025.
He said that “convenience remains an important and strongly growing channel” for the grocer.
The supermarket has also acquired 36 c-stores in the Channel Islands in a deal that complete yesterday (12 November).
Prior to Baitiéh’s arrival, the chain bolstered its convenience offering with the acquisition of McColl’s in 2022. It completed the conversion of these stores to Morrisons Daily earlier this year.
The grocer’s convenience push is also extending to online as it rolled out tie-ups with Deliveroo and Just Eat.
Senior leadership team overhaul
There has been a mass exodus in the senior ranks of Morrisons since Baitiéh’s arrival with nearly a third of its top 60 executives exiting, including convenience director Miles Foster, chief customer officer Darren Blackhurst, property director Mark Nowak, and productivity director Jonathan Bell.
Andrew Staniland
This has allowed him to bring in his new suite of leaders in. This includes Iceland group buying director Andrew Staniland, who Baitiéh’ wooed away from his previously announced move to Asda to join Morrisons as group trading director.
Other new hires include Joseph Sutton as convenience, online and wholesale director, and Andrew Thornber, who currently leads Morrisons’ manufacturing division, Myton Food Group.
Morrisons said its senior team changes reflected some of its key areas of focus, as it sought to “refresh and re-invigorate” the retailer.
Restructuring operations
In March, Morrisons set out plans to slash almost 300 jobs under a management restructure of its logistics operations, as it sought to consolidate its number of warehouse manager roles at each of its seven distribution centres under a single operations manager role.
The restructure involved removing team manager roles in the grocer’s ambient supply chain, reducing roles in its chilled chamber and cutting the number of managers and co-ordinators working within canteen teams.
Morrisons said it was replacing the roles with new hourly-paid positions and shift managers.
The changes also saw the retailer scrap its four-day work week for most of its warehouse and logistics support staff, with staff continuing to work Saturdays while splitting their work across five eight-hour shifts per week from 22 April.
The supermarket launched a consultation process for 297 roles at the time, including warehouse managers, team managers, canteen co-ordinators and people advisors.
Furthermore, in August Morrisons cut down on its night shifts, claiming it was moving towards a combination of twilight and early shifts to make the business more efficient.
Executives insisted that the change was not about saving money, explaining that the new times allowed for a better handover between shifts that improved productivity and resulted in fewer mistakes.
Click here to sign up to Retail Gazette‘s free daily email newsletter
