Morrisons are the fourth largest supermarket in the United Kingdom and the smallest in the “Big Four”. Legally they are known as Wm Morrisons, but customers know them as simply Morrisons, after being formally known as Safeway up until 2004. The chain was founded back in 1899 and stands as one of the oldest supermarket retailers in the UK. Since their inception they have expanded to have over 600 stores within the British Isles.
Are you looking to invest in the supermarket sector? Read on to see if you should buy Morrisons shares.
Stuck in a Rut
Tesco majorly underperformed in 2013, especially in the final three quarters of the year. It prompted many to believe that a reshuffle in the “Big Four” was on the horizon; something that Morrisons could take advantage of. Sadly this wouldn’t be the case, as Morrisons failed to up the ante and came across as a confused retailer to many investors. They can’t seem to decide what their target market is, which has left them in a rut. At arguably the most pivotal time in the company’s history, they also made the mistake of not embracing the world of online shopping. Posting disappointing online shopping revenues, which have been attributed to shoddy advertising and promotion by the chain. For Morrisons shares to prosper again, the company must find a way to break free from this.
Part of the problem with Morrisons is their lack of identity, in what is a supremely competitive market place. Their stores have been branded as “old fashioned” by many retail analysts, with their pricing and promotion strategy coming across as “confusing”. The company has not only lost sight of what its target market image is, but it has also lost its own brand identity somewhere along the way as well. If the company wishes to turn things around and make Morrisons shares appealing again, then this issue needs to be addressed by management sooner rather than later.
All isn’t lost for Morrisons, as the brand still has a strong high street presence up and down the country. They can also take solace in the fact that they haven’t been the only supermarket that has underperformed lately. With a new game plan, Morrisons shares will still have potential and it isn’t too late for the chain to step-up and make a move on their competitors. The question what remains is whether Morrisons have the stomach to completely overhaul their brand in order to do so.
Morrisons have seen their fair share of bad times, especially in 2013. The company has shown that it can’t bring its operations into a new generation effectively. However, in spite of this the company has still maintained its position in the “Big Four”. Morrisons shares provide investors with the cheapest way to get involved with the “Big Four”. But, do Morrisons shares really represent a growth opportunity within a competitive field? Only time will tell.
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