Amazon Hires Tesco Veteran To Run Bricks & Mortar Stores

Tony Hoggett started his career at Tesco as a 16-year-old trolley boy. Over three decades he rose to become CEO Asia and then Group Chief Operating Officer, before starting his latest role in April this year as Group Chief Strategy & Innovation Officer.

NamNews Implications:

• Amazon can afford to populate their retail operation with best in class…
•  …and this is but one example.
• With a Morrisons takeover merely a dip into petty cash…
• Best conduct a what-if re Hoggett running an Amazon-Morrisons combo...
• ...and check how that fits your current trade strategies...

#AmazonMorrisons #GroceryTradeDisruption

Superdrug Takes Big Hit From Pandemic

Over the 12 months to 26 December 2020, revenues at the health and beauty retailer slid 14.8% to £1.11bn, with the group blaming the big drop in footfall on high streets around the UK.

NamNews Implications:

• Key with recognition of the importance of online is the fact that many rivals reached this conclusion a year ago.
• And know that online fulfilment cost reduces overall margin.
• Retail recovery will involve breaking the grocery ‘single trip’ habit * i.e. shoppers combining their ‘chemist’ trip with grocery trip for convenience…

#LockdownHealthBeauty

Tesco Hikes Transport Costs For Suppliers

According to trade publication The Grocer, the extra charges will apply to Tesco’s primary distribution rates, a service run by the retailer that brokers third-party hauliers to collect goods from supplier depots and transport them to its distribution centres.

Tesco is reported to have told suppliers that it will apply an additional 14% surcharge on primary distribution rates from next month until the end of the year.

NamNews Implications:

• Puts official inflation figures of 2-4% in perspective…
• We need to think ‘pound-in-your-pocket' inflation.
• i.e. suppliers and retailers now need to factor real supply chain cost-increases into pricing.
• Negotiation will simply determine who takes the hit first…

#Inflation #PriceIncreases #LockdownConsequences

Sales Growth Slows At Sainsbury’s; CEO Focused On Strategy Amid Takeover Activity

Including both the Sainsbury’s and Argos chains, the group’s like-for-like sales (excl. fuel) rose only 1.6% in the 16 weeks to 26 June compared to a rise of 11.3% in the previous quarter. However, the figure was better than analyst’s forecast of a 1.7% fall. This prompted Sainsbury’s to raise its annual underlying profit guidance from £620m to “at least £660m”, up from £356m last year when the business faced significant costs related to operating during the pandemic.

NamNews Implications:

• Sales growth slowing, yet up on 2019.
• But is it fast enough to remain independent?
• Bound to be a distraction for management…
• Especially with Asda under new ownership, Morrisons under takeover-scrutiny.
• Best for suppliers to anticipate takeover, by harmonising any major Prices & Terms at disparities, at least…More: https://lnkd.in/ePK6gGN

#PricesTermsDifferences #Takeover

Morrisons Facing Bidding War After Accepting Fortress-Led Offer Worth £6.3bn

Another private equity group, Apollo Global Management, is among the potential counter-bidders circling Morrisons.

NamNews Implications:

• Despite promises re future action…
• …a bidding war will result in a higher takeover price.
• Meaning that the purchaser will need to cover the additional cost.
• (and justify the level of investment…)
• It can be assumed that Morrisons are running a very tight operation (i.e. little scope for internal cost reduction)
• Therefore remaining options will then be:
• Sale & leaseback of the 85% owned retail estate (resulting in lower net margins because of having to pay rent for stores).
• Downward pressure on supplier prices.
• Or a mix of both…?

Government Holds Emergency Talks To Avoid Gaps On Supermarket Shelves

Officials from the Department for Environment, Food and Rural Affairs (Defra) are reported to have discussed potential solutions, including relaxing restrictions on drivers’ working hours and a temporary suspension of overnight delivery curfews, whilst increasing HGV training capacity for local drivers.

NamNews Implications:

• When the public sense shortages, stock-piling will follow.
• An emergency temporary stopgap would be to allow more EU drivers into the UK.
• Hopefully it will not take the government too long to recognise the obvious?

#LorryDrivers #FoodShortages #StockPiling

Asda Launches ‘Express Delivery’ Service

This offers home delivery within an hour. However, unlike some other providers, the UK’s third-largest supermarket is making its full online product range available for rapid delivery.

NamNews Implications:

• If Asda customers are prepared to pay delivery fees (£8 plus) for Asda’s service…
• …this becomes a pointer for other mults.
• Suppliers need to ensure their supply chain responses are up to these standards.
• And add Fancy, Getir, Weezy, Gorillas and Jiffy to their strategies...

#QuickCommerce #AggregatorsPurePlaysRetailers

Grocery Market To Slow Sharply In Short Term; Online, Discount And Convenience To Remain Fastest-Growing Channels

In its annual retail food and grocery channel forecasts, IGD predicts that the unprecedented 8.5% growth seen in 2020 will slow to 1.7% in 2021 and then to 0.9% in 2022, as shoppers economise and the eating out industry reclaims sales. However, this sharp decline is expected to be followed by a period of modest recovery that will see the market grow by 8.1% to £229.1bn over the next five years. 

#PredictionsByChannel #GroceryChannelShares #5YearPredictions