Asda Planning Sale & Leaseback Of Stores To Raise Cash

 Asda Planning Sale & Leaseback Of Stores To Raise Cash

Asda is hoping to raise around £400m from the sale & leaseback of 20 of its supermarkets to fund its turnaround plan.

According to property-focused publication Green Street News, the struggling retailer has appointed real estate adviser Eastdil Secured to seek out buyers.

Sale & leaseback deals are popular among major supermarkets as a means of raising capital to shore up their balance sheets, with Sainsbury’s and Morrisons completing deals in the last few years.

An Asda spokesperson said: “Sale & leasebacks have been a feature of the retail industry for many years.

“While maintaining a strong freehold base remains central to Asda’s property strategy, we will consider suitable opportunities to unlock value from our property portfolio as part of our material programme of investment into the business.”

Allan Leighton, who returned to Asda at the end of last year as Chairman, has pledged to turn around the group’s fortunes by cutting prices, improving product availability, and refreshing tired stores. Analysts have estimated that the plans will cost close to £900m over the next three years.

Back in March, Leighton warned that the investment drive would “materially reduce our profitability this year” but said he had “a pretty significant war chest” to tackle several years of weak trading at the supermarket.

However, with debts of £3.8bn left over from the takeover by TDR Capital and the Issa brothers in 2021, it has been suggested that Asda has limited firepower for a prolonged price war with its rivals.

NamNews Implications:
* Can be a good source of cash…
* …to cover the cost of turnaround plans (£900m).
* So sale & leaseback process will continue until that point is reached, at least.
* But the business patently then has to cover the cost of rent that it previously owned..
* ...thereby diluting the bottom line...
* It ain’t over yet…
hashtag#Asda hashtag#SalenLeaseback

Tesco Aiming To Get Market Share Back To 30% With Help Of Brands

 Tesco Aiming To Get Market Share Back To 30% With Help Of Brands

Tesco has told suppliers that it wants to control 30% of the grocery market in the UK, a position it last held in 2012.

Latest data from Kantar shows that the market share of the UK’s leading supermarket chain currently stands at 27.8%, having made significant gains over the last year.

According to trade magazine The Grocer, the group’s Chief Commercial Officer, Ashwin Prasad, told delegates at the Tesco Business Update event hosted by IGD on Tuesday that it was focused on capitalising on its appeal to brands as the retailer most likely to bring about growth.

Declaring ‘To Grow Faster’ as the mission statement for Tesco, he told suppliers at the event that it could beat the offer of any of its rivals on value and quality, service and availability, and was the best vehicle for them to achieve gains.

Prasad added: “We want to grow with our suppliers and deliver against our priorities: ensuring we’re number one for value and quality; being their number one innovation partner; offering the best retail media platform; and delivering the best service and availability to our customers.

“We’re encouraging our suppliers to work with us and make us their primary partner to deliver growth.”

Speaking to The Grocer about the retailer’s strategy, Ged Futter, founder of The Retail Mind, said: “Tesco is confident it can return to a 30% share because it’s winning customers and knows what it’s doing is working.

“They don’t need to reinvent the wheel either. I think the main targets for Tesco’s share growth will be Asda and Morrisons. They are the easy targets because they’ve got more branded stuff.

“Aldi Price Match is all about own label, it isn’t about brands. That’s working, what they need to unlock is investment from the brands.”

NamNews Implications:
* ‘Focused on capitalising on its appeal to brands as the retailer most likely to bring about growth’
* i.e. likely to keep own label and brands at appropriate levels to optimise potential Retail Media revenues.
* Tesco priorities:
- Ensuring we’re number one for value and quality
- Being their number one innovation partner
- Offering the best retail media platform
- Delivering the best service and availability to our customers’
* i.e. Demonstrate how your brands fit with these priorities to optimise your brand opportunities.
* And as Ged Futter implies, your Tesco growth will be at the expense of Asda and Morrisons.
* BTW, worth keeping in mind that delegates at the IGD Tesco Business Update event had personal access to these insights two days ahead of non-delegates…?
hashtag#Tesco hashtag#IGDTescoBusinessUpdate

Turnaround Plan Yielding Results At Holland & Barrett

 Turnaround Plan Yielding Results At Holland & Barrett

Investment in its stores and product offer has helped drive up sales at Holland & Barrett by 10% in the second year of its turnaround strategy.

Over the 12 months to 30 September 2024, the health & wellness retailer saw its revenue increase from £806.1m to £884.5m after customer numbers rose by 9% to an all-time high.

Sales volumes across the group grew by 5%.

Gross profit improved from £475.7m to £524.2m after a £96.3m investment programme helped accelerate its digital transformation and overhaul its UK distribution centre and global production facility. Meanwhile, pre-tax losses narrowed to £61.8m from £73m.

Holland & Barrett’s ‘transformation strategy’ aims to meet the growing demand in the wellness and preventative health space.

In the year, it opened 36 new stores and overhauled 320 existing sites, launched new partnerships and concessions in the UK, Ireland, Netherlands and Belgium.

It also expanded its own-label range (+ 400 products, total to over 1,000 new lines in two years, including a revamped food range, which saw a 34% increase in sales in 2024.

Alex Gourlay, Executive Chair of Holland & Barrett, said: “This has been a landmark year for our business – one defined by purpose, transformation and a significant investment in the future of this 150-year-old business.

“With societal shifts towards prevention, testing and self-care, and insufficient public health care provision due to constraints on national health systems, there is an increasing unmet need which Holland & Barrett was well positioned to serve.

It is with great pride, that we have taken the bold steps necessary to meet the evolving needs of our customers, accelerating our transformation journey and laying a strong foundation for long-term growth.”

The company revealed that it has seen last year’s strong growth carry into the first half of its current financial year, with sales and gross profit both up 8% and customer numbers continuing to grow.

Gourlay added: “Our retail performance continues to outperform the UK and Netherlands high streets and compares strongly against other European countries. We are energised by the momentum we’ve built and excited for the opportunities ahead.”

Meanwhile, he told The Times that the use of weight-loss drugs such as Ozempic and Mounjaro is helping drive sales at Holland & Barrett. Gourlay revealed that the chain was “reformulating” its range to cater to customers using the appetite-suppressing treatments, which can see people switch to healthier options.

NamNews Implications:
* Customer numbers rose by 9% to an all-time high.
* Sales volumes across the group grew by 5%.
* i.e. real growth…
* Meanwhile, Holland & Barrett’s ‘transformation strategy’ aims to meet the growing demand in the wellness and preventative health space.
* i.e. If you want in, be seen to align with these aims…
* …and deliver real numbers.
* Simples!
hashtag#HollandNBarrett