That's the spirit – a big retail boss who is prepared to say when his soggy sales numbers will turn positive. Going where Marks & Spencer's Marc Bolland feared to tread on clothing, Morrisons' Dalton Philips predicted on Thursday that a run of seven successive declines in the supermarket chain's quarterly like-for-like sales is about to end. The turnaround will happen in the Christmas quarter, said Philips.
On the (usually reliable) principle that bosses set public targets only when they know they can be met, the forecast looks safe.
It is not hard to guess why Morrisons thinks it can go from minus 2.4% in the third quarter to a positive figure in a single jump. Unlike M&S in clothing, Morrisons enjoys the benefit of new, and maturing, space starting to contribute towards the like-for-like readings; the group has had its foot to the pedal on convenience stores in recent years. It will also crank up promotional activity, a factor that was missing during the summer. And the recent industry-wide sales data showed Morrisons gaining share in October. Besides, it had a shocker last Christmas.
Jolly good, so has the Philips medicine – tighter management, more convenience stores and a belated launch into online via a partnership with Ocado – worked? It's too early to say that, since the online venture will be launched only in January. But one can say that Philips intends to arrive in home delivery with a splash, promising that by the end of next year Morrisons will be able to serve 50% of UK homes, including London.
That implies a lot of extra online capacity coming on stream in a hurry. For the supermarket industry as a whole, the big question remains unanswered: when you are delivering to punters' homes for a £5 charge, a rate that looks uneconomic, how can profit margins in the old-style stores be sustained? Once he has delivered the Christmas revival, there's Philips' next challenge.
