Morrisons, Morrisoff

British retail seems to be in a bit of difficulty. To be fair it’s mainly the leviathans that haven’t moved with the times. BHS for example. A company that ignored having an online presence until it was too late. Probably this comes about because the management are afraid to make a mistake changing things, and anyway they have years of successful track record to prove that it can continue to be done the way it’s always been done. Aces in the hole don’t always win.

BHS is of course another company that has an astronomical phenomenon on its balance sheet: a pension black hole. It is government that will pick up that tab if BHS does fail fatally. So once again those of use that have taken responsibility for our own futures end up subsidising everyone else.

Meanwhile, the High St battle of the supermarkets continues. It’s reasonably easy to see the market segment that each caters to. I have a Waitrose near me. It suits me very well, not least because they have a checkout desk that says “10 items or fewer”. What a relief. The correct grammar! I don’t have to mention how “it’s not ‘less’, it’s ‘fewer’” every single time I pass through the store. Waitrose is great if you want quality products and you don’t mind paying through the nose for kidney beans to go with your quality beef. If you want those cheaper, loss-leader kidney beans with the good beef for your chilli, then Tesco is the store for you. And so it goes in varying degrees until you get to the likes of Lidl and the stack ‘em high sell ‘em cheap mongers. The one store that seems to lack a home for my reckoning is Morrisons (MRW). It’s ‘slightly more expensive cheap stuff’. Not premium though. You can discount quality, and you can sell cheap. But you can’t upgrade discounts. I can’t see who they will attract customers from. And that’s how this ‘war’ will be won. It’s a circulation war, to put it in terms of the press.

I’ve written quite a bit about Morrisons over the months, suggesting a hostile take-over is their fate in a blog post in March.

A couple of new developments though. A big Morrisons store has closed near me. That’s surprising, because it’s been there for years and was always busy. Is it the only one? Why would they close a store in a busy West London shopping street?

The second development is again my own observation. My Local is the new name for the former M Local, Morrisons’ attempt at the small footprint store that Tesco and such like have done well with. Late to that market, they failed and sold them to a consortium. My Local is supposed to have local produce in store and be a slightly up-market convenience store. I can’t see that at all. They sell the same sandwiches, and cheeses, and biscuits, and tins, and just about everything that any other store of its kind sells. What is interesting though is that a couple of Sundays ago I popped in to my local My Local to have a nosey around. No sandwiches, three pies and a few cuts of meat. There were plenty of empty shelves. I asked what happened. “We haven’t had a delivery for two days” was the answer.

Now why would a store that’s paying staff not bother to deliver? Financial problems? That would be my guess. What does this have to do with Morrisons? They’re on the hook for up to £20m if the My Local stores fail.

This is supported in the price chart by a failure at resistance and the price is now falling to support, where it will fail sooner or later, and presumably entice a take-over bid. I see a potential suitor as a company like Spar, the massive European supermarket concern that has no big stores here, just convenience stores.