The gloves are off. Morrisons have declared war on Aldi and Lidl sees the race to the bottom takes another sharp fall with £500m of property sales to fund price cuts. It is hard to see how Morrisons wins this battle in the long term. Using property cash to shore up market share is a short-term strategy with any victory, pyrrhic. What happens when the money is spent? Aldi will still be there, still opening new stores. And Morrisons?
History does not always repeat itself, but there are looming shades of Safeway’s last fight. Seeking to stem a loss of customers to Tesco, Safeway invested in hard-hitting promotions. It wasn’t sustainable – and in 2005, Morrisons picked up a Southern store base, thank you very much!.
Fast-forward 9 years. The Sunday Times (March 9th 2014) reported Sir Ken Morrison as being “apopleptic” with the current performance of the business; one can only imagine how he would feel if the retail name he spent his life building faced the real prospect of disappearing from the high street.
If there is any fall out, a troubled Morrisons, with a diminished property portfolio, might let Sainsbury move in, move north and get mightily close to matching Tesco’s leadership position. Morrisons misery may catalyse Coupe’s coup. Ding Ding..Round 1.