Morrisons: Dumbledore David Potts does it again. Can he keep up the magic?

The chain’s revival has been spectacular, but the real challenge is to come for its chief executive

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David Potts is rapidly becoming food retailing’s Dumbledore. 

It’s easy to forget just what a state the supermarket group he runs was in before he took on the role of headmaster. 

Had anyone suggested that Morrisons would, by 2017, be reporting rising profits at the top end of analysts’ forecasts, a robust increase in sales at stores open at least a year, and, crucially a relatively upbeat outlook, they’d have been laughed out of the City. 

It just didn’t seem possible that, after years of drift followed by a spiral into what looked like an all but terminal decline, Morrisons could be turned around by anyone, let alone someone who missed out to the patently unsuitable Phil Clarke in the race to run Tesco after Sir Terry Leahy’s departure. 

Now it looks like Tesco missed a trick. Morrisons is setting the pace, even in the face of the competitive challenge posed by the revival at Mr Potts’ old shop, sparked by former Unilever exec David Lewis. All hail the two Daves. 

The task now faced by Mr Potts is to turn the startling turn around he has stoked into something more sustainable. 

His chairman Andy Higginson came up with the best line. “Food retail is a simple business but it is not easy,” he said. Just so. 

But it becomes an awful lot simpler if you just listen to your customers, and put their interests first, and this Mr Potts has so far done, in addition to his strategic moves such as ditching the convenience store business, while injecting some life into the online offer via a wholesale deal with Amazon.  

Morrisons stores have been spruced up. I hadn’t visited one in years prior to the company unveiling an evil scotch bonnet chilli laced pizza that garnered quite a bit of publicity when the store unleashed it over Halloween. I was pleasantly surprised by what I found.

The chain has long made a virtue of its fresh food. Customers are starting to believe the hype. However, its willingness to get its prices closer to those of Lidl and Aldi didn’t hurt. 

To do that, Mr Potts had to tell the City some hard truths. Shareholders had to accept that they were going to get less on the way to (potentially) getting a bit more in the future. Customers come first! That that is still a radical notion among some retailers tells you all you need to know. 

Of course, Mr Potts had the advantage of being the new boy. That meant he could kitchen sink his predecessors messes, and still get away with telling his investors things they didn’t really want to hear. 

Thing is, as Mr Higginson said, food retailing is not easy. There may come a time when Mr Potts has to repeat the same message, not as the saviour flying in on a broomstick with Fawkes the phoenix at his side, but as a longstanding chief executive whose shine is showing some tarnish. 

So far he’s doing all the right things, promising to limit price rises that may follow from the weak pound’s impact on imported food, pledging a “continued investment” in “colleague pay” because when staff are happy their interactions with customers are positive.

These are measures aimed at securing the business’s long term health, potentially at the expense of short term sparkles. But Mr Potts will have to keep it up. 

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