Supermarkets

Kroger woes augur deep discounts at U.S. grocers

15 Jun 2017

The supermarket chain is the latest victim of price-cutting, losing nearly $5 bln in value after shaving earnings guidance. Wal-Mart is stepping up efforts to undercut rivals while German discounters Aldi and Lidl are expanding stateside. Consumer gains mean shareholder pain.

Whole Foods board changes whet activists’ appetite

10 May 2017

The $12 bln organic-food purveyor is replacing more than half of its board, a step to appease Jana Partners. But the fund, with 8 percent of shares, wants a sale, and others are pounding the table. As long as Whole Foods same-store sales keep declining, they’ll stay hungry.

Sainsbury over-seasons a stale retail recipe

3 May 2017

The supermarket’s full year like-for-like sales fell 0.6 percent, despite help from recently acquired Argos. Rival Tesco is diversifying too through its purchase of wholesaler Booker. Greater complexity masks problems caused by a long price war, but doesn’t fix them.

Whole Foods can make Cerberus complete in grocery

25 Apr 2017

Trump pal Steve Feinberg's private-equity fund pulled a $12 bln float for supermarkets chain Albertsons in 2015. Albertsons could go public, and burnish its shelf space, by reversing into organic grocer Whole Foods. GE’s recent deal with Baker Hughes shows how that might work.

Tesco customer-first strategy will chafe investors

12 Apr 2017

The grocer had its first full year of like-for-like UK sales growth in seven years. Boss Dave Lewis hopes to shield shoppers from rising prices, but not crush suppliers. The risk is that he has to fund that plan with the spoils of Tesco’s $4.6 bln purchase of wholesaler Booker.

Corona Capital, March 18: Elizabeth Warren

18 Mar 2020

Breakingviews has launched a daily column covering pandemic-related insights that you might have missed. Throughout the day, we’ll bring you shorter-than-usual views with the same financial savvy on companies, economies and capital markets during this important unfolding story.

German wanderlust intensifies U.S. grocery wars

24 Feb 2017

Discount supermarket Lidl is following rival Aldi with plans to open 100 U.S. stores. Armed with an extra-lean business model, Aldi is already succeeding where Tesco, for one, failed. That will add to pricing pressures on traditional food retailers and even the likes of Wal-Mart.

Metro AG could be winner in Tesco’s wholesale deal

27 Jan 2017

The German retailer plans to split and form a retail-wholesale group not dissimilar to the British supermarket's 3.7 bln pound acquisition of Booker. If the market's view on Tesco's tie-up is any guide, Metro can argue its own investors aren't giving it full credit.

Tesco takes tighter grip in retail tug-of-war

27 Jan 2017

A near-20 billion pound merger with wholesaler Booker is a smart response to disruption of the UK group's traditional supermarkets. But it will worry suppliers, who will provide most of the big cost savings. And Tesco may use its surplus to cut prices rather than hike dividends.

Whole Foods founder may have to break his own mold

3 Nov 2016

John Mackey is becoming sole boss, ending a rough six-year run for the $9 bln grocer under a co-CEO structure. Sales have been falling amid stiff competition. Starbucks and Apple proved an entrepreneur's zeal can revive a company, but Whole Foods could use radical rethinking.

Morrisons shows there’s life in large supermarkets

15 Sep 2016

Britain’s fourth-largest grocer has racked up three consecutive quarters of positive sales despite being an online laggard and having no fast-growing convenience stores. Operating margins have also improved. CEO David Potts is playing a bad hand well.

Flighty shoppers keep UK grocers on their toes

2 Jun 2016

Customers still visit Tesco and Sainsbury’s in the same numbers, but not for their entire trolley. A new pick ‘n’ mix approach to shopping shows customers are no longer a captive audience. The challenge for the Big Four is to make a visit to the German discounters less worthwhile