Showing posts with label Walmart. Show all posts
Showing posts with label Walmart. Show all posts

Thursday 24 November 2016

Walmart needs to cut Asda loose

An interesting article published earlier this year by Bloomberg sets out why Asda should be sold off:

Aldi & Lidl have eliminated Asda’s low price advantage, resulting in falling like-for-likes, with Asda’s sales growth trailing the other mults… (graphs in the original article really spell it out).

NamNews readers will be aware that Asda has been underperforming and thus diluting Walmart’s performance in terms of ROCE and Net Margin since its acquisition in 1999.

Normally, Walmart would have solved these problems by a combination of organic growth and acquisition of say Sainsbury’s or Morrisons, but UK planning legislation limits the building of new stores and competition legislation prevents acquisition of sizable competition.

This leaves sell-off as the only option for their UK operation.

Bloomberg estimates that Asda would be worth £8bn based on current market valuations of the other mults (i.e. @ 40% of sales).

The UK, in current competitive circumstances (Discounters, large space redundancy, seismic-shifts, ‘Brexit’ currency impact…, you name it!) would be unattractive for global players, given the probable purchase price and the need to justify the move to their respective stock markets.

This leaves private equity.

In which case, we enter a whole new ball-park, where the emphasis would shift to optimising the asset-base (stores) and financial performance (ROCE), in a 5 year time-frame leading to flotation….

This would provide a new basis for NAMs in their dealings with Asda:
  • Emphasis on quantifying cost & value in all aspects of the supplier-Asda trading relationship (Margin, Credit, rotation, trade investment, NAM-advice, and deductions)
  • Relating trade investment directly to Asda P&L
…and all within a 5 year window….

Thursday 6 October 2016

Walmart chase Amazon, catch up not guaranteed...

News that Walmart are accelerating their roll-out of warehouses, robotising logistics, randomising warehouse shelf- placement, speeding up delivery and devouring a host of e-startups all points to the fact that they have simply applied to enter a race with the advantaged innovator...

However, satisfied users of Amazon's service already take for granted infinite choice, 1-click ordering, 100% availability, 1-day (Prime-free delivery) and no-quibble returns.....

In other words, Amazon's entry requirements need to be met before Walmart can start running...

However, they will add interest to the race, and provide suppliers with a little more choice in what was beginning to seem like a 1-horse contest.

Suppliers that want to optimise online, also need to start with these Amazonian entry-standards, or move back to the sidelines...

Thursday 14 July 2016

Publicis - Walmart's New Primary Agency of Record

According to yesterday's NamNews, Walmart has entered into what is being described as a strategic partnership with Publicis Groupe that will give the retailer “unfettered access” to all of the holding company’s agencies and resources.

In practice this means Publicis becomes Walmart's Primary Agency of Record i.e. an advertising agency authorised by an advertiser to buy advertising space and/or time on its behalf.

More than that, it gives Walmart access to all agency resources, globally, in managing Walmart’s US advertising and in-store creative giving the retailer access to resources outside of marketing, including capabilities to support corporate reputation and technology that builds relationships with customers.

In other words, think state-of-art, uniform, co-ordinated, creative  management of all communication with customers..

Add whatever it takes in terms of deep-cut EDLP to regain and maintain market share, big time, and you have a new dynamic in the market..

Asda has to be part of this…

More here

Time for NAMs to conduct some what-ifs in exploring the impacts on their categories…?  .

Wednesday 15 July 2015

Asda Move Closer to Walmart - the two-pat approach to ‘Save Money, Live Better’

Further to NamNews' report on Asda's Overhauling Of Its Brand To Bring It More In Line With Walmart, NAMs might benefit from a deeper dig into where Walmart are headed in coping with Aldi/Lidl, and online competition like Amazon Fresh.

In fact, Walmart Food EVP Steve Bratspies' recent presentation to the Bentonville Bella Vista Chamber’s WalStreet (sic) supplier group gives considerable insight re Walmart's food plans, and by inference, a view of where Asda is headed.

Five building blocks that will remain
Bratspies outlined five customer promises that are foundational to Walmart’s strategy in the midst of these shifts.
  • EDLP – Price is still “the decider,” even as the bar is being raised across other customer criteria.
  • Quality you can trust – Customers are smart enough to expect one-dollar quality on a one-dollar item but won’t tolerate one-dollar quality on a five-dollar item. Quality is defined by the item being purchased.
  • Everything you need – Despite its forays into small formats, Walmart is still very much in the supercentre business and is invested in facilitating a one-stop-shopping experience for its customers.
  • Happy to help – Of Walmart’s three sub-promises (a fast, clean, and friendly shopping experience), friendliness makes the biggest difference at the end of the day.
  • Shop your way – Customers must be able to access Walmart online from any device and from multiple locations.
Walmart's Growth Game Plan
1. Win in fresh
2. Re-energize the centre of the store
3. Expand physical-to-digital integration
4. Win on the fundamentals

Above all, Bratspies encouraged global suppliers to bring great ideas from other markets, empowering Walmart-facing teams to make decisions and “come sell us stuff”, pointing out that that their buyers are there to buy.

In other words, make a point and back it up with the numbers...we are listening like never before...

Hat-tip to Carol Spieckerman via Pete Louree and Spencer Booz