Current problems worth considering

Key problems
• Pricing: Morrisons' value credentials are under fire. The chain's prices have closely tracked those of rival Tesco, but lost ground compared with Asda, according to analysts at Bernstein who estimate that Morrisons is now 5%-6% more expensive than Asda, the cheapest of the big four. Morrisons has so far not produced its promotional equivalent of Sainsbury's Brand Match or Asda's Price Guarantee, which are designed to reassure shoppers on price. Meanwhile discounters such as Aldi and Lidl have increased the quality of their groceries compared to mainstream supermarkets.
• Brand communications: The cheery but expensive presence of celebrities Ant & Dec in Morrisons' ads does nothing for the supermarket's value for money credentials. Even Sainsbury's has ditched celebrities in favour of bloggers like Jack Monroe. Recent campaigns have placed more emphasis on pricing deals but the retailer needs to focus on the combination of fresh, British food and low prices that once made Morrisons a powerhouse.
• Convenience: Shoppers now prefer to buy little and often, close to home. Morrisons' small M Local chain is growing fast, but some industry insiders say the haste to add new outlets has meant it has snapped up some expensive outlets in the wrong places. Getting the right stores will be crucial in building a viable chain.
• Online: Morrisons had little choice but to accept that its shoppers were moving online, but its expensive partnership with Ocado has cost the business millions that could have gone into improving prices. The service needs to win new customers and additional profits if Morrisons is going to justify its investment. After all, Aldi and Lidl are growing rapidly without online stores.
• Stores: Activist shareholders want Morrisons to put its property assets - with an estimated value of as much as £10bn - into a separate entity as the potential valueis not fully recognised in the retailer's current stock market capitalisation. Most industry experts believe such a radical move is unlikely and unwise but selling and leasing back some stores, 90% of which are freeholds, would give Morrisons some cash to invest in its business.

http://www.theguardian.com/business/2014/feb/12/morrisons-private-equity-buyout-talk-sir-ken-morrison