Morrisons Boosts Marketing Investment by 20% in 2023 Amid £1 Billion Loss
Despite facing a significant pre-tax loss of nearly £1 billion, Morrisons has ramped up its marketing expenditure in 2023 to enhance customer value perceptions and market presence.
Morrisons
Morrisons significantly stepped up its marketing spend in 2023, despite its parent company making a near £1bn loss.
Market Topco, the supermarket’s parent company, which also owns convenience chain McColl’s and Morrisons, reported a pre-tax loss of £919m for the year ending 29 October 2023.
The loss was influenced by the increasing cost of debt, as well as a decrease in revenues for Morrisons. Total revenue for the group dropped from £18.48bn in 2022 to £18.36bn in 2023.
The supermarket chain faced challenges as it lost market share to discounters. In September 2022, just before the start of its 2023 financial year, Morrisons was overtaken by Aldi, dropping to the fourth spot in the UK in terms of market share.
Despite experiencing a nearly £1bn loss, Morrisons made a significant investment in marketing during its latest financial year. The supermarket chain allocated £204m towards marketing and advertising in the year ending on 29 October 2023, marking a 21% increase compared to the previous year.
Morrisons increased its spending as it revamped its brand, bringing back 'More Reasons to Shop at Morrisons' in a new campaign and improving its loyalty program. This move was aimed at being more 'bold' in its marketing, according to Rachel Eyre, the chief customer and marketing officer at the supermarket.
"Morrison's is a brand with heart and soul," said Eyre, mentioning that they had been playing it too safe.
The supermarket implemented five rounds of price cuts last year, including the launch of the 'Prices Locked Low' campaign in March 2023. They also enhanced their 'Savers' brand with updated packaging and over 50 new products added to the range.
Morrisons stated in its annual report that it has been working hard to create a brand that is wider, stronger, more popular, and easier for customers to access. The report highlighted the importance of offering value and staying competitive as key elements of its strategy.
According to Morrisons, providing value for money continues to be the top priority for customers when choosing where to shop.
The supermarket emphasized its commitment to providing value through initiatives such as price lock, loyalty offers, and its own brand range.
In a recent move, Morrisons further demonstrated its dedication to offering value by introducing a price match with discounters Lidl and Aldi earlier this year.
Eyre spoke to Our Website about the launch, stating that the initiative provides consumers with "reassurance" on price. The goal is to make customers feel confident in doing more of their shopping at Morrisons, rather than searching for the best deal elsewhere.
She emphasized, "We aim to eliminate any barriers for our customers and make shopping at Morrisons as convenient as can be."
Morrisons is looking to bounce back from a near £1bn loss last year in 2024. The new CEO, Rami Baitiéh, expressed his dissatisfaction with the supermarket's financial performance.
As the top marketer, Eyre, goes on maternity leave, former group commercial director Darren Blackhurst will temporarily take on the role. One of Blackhurst's main focuses will be revamping the company's pricing strategy, according to Baitiéh.
Editor's P/S:
Despite incurring a substantial loss, Morrisons' bold marketing strategy in 2023 is a testament to its resilience and commitment to regaining market share. The supermarket's revamped brand, loyalty program enhancements, and aggressive price cuts demonstrate its determination to differentiate itself and attract customers. The investment in marketing reflects a shift in focus toward customer engagement and value proposition, as consumers prioritize affordability and convenience in their shopping decisions.
Morrisons' price match initiative with discounters highlights its willingness to adapt to market dynamics and address consumer concerns. By providing reassurance on price, the supermarket aims to capture a larger share of customers' wallets and foster loyalty. The upcoming leadership changes, with Darren Blackhurst assuming the marketing role, signal a renewed emphasis on pricing strategy. Morrisons' efforts to recover from its financial setback in 2024 will be closely watched, as the supermarket navigates an increasingly competitive grocery landscape. leading supermarket chain in the UK.
