Supermarkets

Sainsbury’s and Walmart test UK merger taboo

28 Apr 2018

Britain’s second- and third-largest grocers plan to merge, with Asda’s U.S. parent as the junior partner. Joining forces is a logical response to the threat from Amazon and rival Tesco’s tie-up with wholesaler Booker. Still, it’s an audacious challenge to competition authorities.

Tesco’s turnaround may bring forward regime change

11 Apr 2018

Three years after an accounting scandal and price war, the grocer is improving margins and cutting debt. It’s the least shorted of all British supermarket stocks. Boss Dave Lewis’ revamp looks within reach. The question for investors is whether he’ll stick around to finish it.

Dutch lawmakers give Ahold backup in activist spat

10 Apr 2018

Activist CIAM wants the supermarket to scrap its foundation that can be used to block takeovers. But with the Netherlands eyeing new laws to stymie hostile bidders, companies may not need these arcane tools much longer. Shareholders will suffer either way.

Booker boss is pied piper of Tesco deal

28 Feb 2017

The UK wholesaler’s shareholders approved Tesco’s 4 bln pound takeover, despite a slim premium and activist calls for a beefed-up price. Booker CEO Charles Wilson will work on finding synergies with Tesco. A history of stellar returns made investors willing to follow his lead.

Walmart’s online push loses buying power

20 Feb 2018

Growth of e-commerce sales at the $310 bln retailer slowed sharply over the holidays as the effect of digital acquisitions faded. Walmart signaled some turbulence ahead too. It's a rare setback since the Bentonville, Arkansas outfit bought Jet.com in 2016.

Russia’s $2.5 bln Magnit sale is governance downer

16 Feb 2018

Founder Sergey Galitskiy is selling most of his 32 pct stake in the supermarket and vacating his role as CEO. While the company has struggled, his interests and those of minority shareholders were aligned. With state bank VTB stepping in, incentives could become more complicated.

Tesco has to decide which investors to annoy

13 Feb 2018

Activist fund Sandell wants the UK supermarket group to up its 3.9 billion pound bid for Booker. A high hurdle for approval means a small minority can derail the deal. But if Tesco sweetens the offer, it will anger shareholders like Schroders who already think the price too rich.

Tesco pay showdown contains a wider warning

8 Feb 2018

A claim that female shop workers should get the same wage as male warehouse staff could cost the UK grocer up to 4 billion pounds. It’s a lesser-known twist on equal pay. While retailers Asda and Sainsbury’s face similar legal challenges, all sectors may be exposed.

Breakdown: Why Steinhoff’s complexity may save it

24 Jan 2018

An accounting scandal has exposed the retailer’s warren-like structure. Creditors who are owed close to 11 billion euros face a fight for repayment. But the prospect of a messy restructuring may help keep Steinhoff afloat for now. Breakingviews offers a guide through the maze.

Carrefour picks right rescue plan five years late

23 Jan 2018

After two profit warnings, the new boss of Europe’s largest retailer will invest 3 bln euros to fend off online competition, and pledged to cut costs. A partnership with Tencent may help its ailing China unit. But sweeping change will be tough, and Carrefour is far behind rivals.

Carrefour’s bad news will come in threes

17 Jan 2018

Europe’s biggest retailer issued a second profit warning in five months on weaker sales. New CEO Alexandre Bompard will unveil his turnaround plan next week. With a need to ramp up online investment and cut back on hypermarket stores, notably in France, greater pain is to come.

M&S held back by dowdy online look

11 Jan 2018

The high street retailer’s food and clothing arms met quarterly forecasts, but both have strategic issues. M&S could dearly use the 25 pct-plus online sales growth seen by smaller rivals like Boohoo.com. Its current measly 3 pct showing is exacerbating its other problems.

Sainsbury’s is proxy for UK retail’s split fate

10 Jan 2018

The Argos-owner’s food business had a better Christmas than its clothing and general merchandise. UK consumers, stung by high inflation, are spending less on non-essential items, but still need to eat. That means grocers are better able to pass on rising prices to customers.

Unilever and Nestlé will sidestep supermarkets

27 Dec 2017

The duo’s decade-high operating margins are being squeezed between grocers, who are bargaining harder on price, and new ways of shopping. Selling direct to consumers is one way to reach ambitious profit goals that were set to appease activists. But the strategy is risky.

Ocado gets dubious halo as Europe’s Amazon bulwark

28 Nov 2017

The online retailer’s shares jumped by a fifth after it signed a deal to develop Casino’s digital offering. Investors are pricing in more agreements as European grocers react to the U.S. tech giant edging onto their turf. Ocado’s track record suggests they may be disappointed.

Wal-Mart flexes its muscle in Amazon fight

16 Nov 2017

The $268 bln retailer increased its third-quarter revenue as more people visited its stores. Online, the firm kicked out an impressive 50 percent increase in sales. Even grocery sales improved. The Bentonville, Arkansas giant is worth keeping a close eye on in Seattle.

Tesco is spinning its wheels to get nowhere fast

4 Oct 2017

CEO Dave Lewis has boosted margins at Britain’s biggest supermarket, shrunk the pension deficit and cut debt. The first dividend in three years confirms the rebound. Yet the threat from inflation, weak consumer demand and online rivals have left Tesco shares stuck in a rut.

Amazon European shopping talk is wishful thinking

28 Sep 2017

Supermarkets Carrefour and Sainsbury have been floated as potential targets following the e-commerce giant’s $13.7 bln purchase of Whole Foods. But CEO Jeff Bezos already owns the one grocer he really needs. Bid speculation only obscures the broader competitive pressures.

Carrefour’s ills demand Tesco-like revamp and more

31 Aug 2017

The French supermarket said full-year operating profit could fall 12 percent, partly due to stiff competition at home. The grocer’s new CEO faces even more challenges than Tesco’s Dave Lewis did three years ago. Domestic market share is shrinking and its online offering is weak.

B&M is unimaginative punt on Brexit Britain

24 Jul 2017

The discount retailer has been named as a potential 4.4 bln pound target for Wal-Mart’s Asda. With incomes tightening, UK shoppers will want cheaper goods. Yet Asda could as easily soup up its existing offering or copy rivals Tesco and Sainsbury’s with a more ambitious deal.