Thursday, 25 November 2021

Retailers Putting Up Prices At Fastest Pace In 30 Years Amid Early Christmas Shopping

Faced with mounting cost pressures, retailers in the UK are putting up prices at the fastest rate since 1990 whilst benefitting from early Christmas shopping due to fears over supply disruption.

In the CBI’s quarterly Distributive Trades Survey, the balance of retailers reporting higher selling prices stood at +77% in November. That was the highest level since May 1990, with the pace of rises expected to be broadly similar next month.

NamNews Implications:

  • We have all experienced the inflation drivers in 2021.
  • So no surprises then…
  • Only issue is by how much?
  • How about 5% for starters…
  • …or perhaps a more realistic 10%?
#Inflation #CostPrices

Wednesday, 24 November 2021

Lidl GB Returns To Profit; Sets New Store Target

Latest accounts for the year to 28 February 2021 show Lidl GB recorded a pre-tax profit of £9.8m, compared to a loss of £25.2m in the previous 12 months when it invested heavily in store openings, recruitment, and its supply chain.

Lidl’s total sales rose 12% to £7.7bn, boosted by 55 new openings and raised demand for food & drink in supermarkets during the pandemic.

NamNews Implications:
  • NPBT 0.1% is still very slender, but on the right side of breakeven.
  • And these discounters have more experience of excelling on slender margins than most…
  • And Lidl continuing to invest during loss-making lockdown…
  • …shows they are still a threat to the UK mults.
  • Meanwhile, Brexit caused ‘an increase in administration for importing and exporting goods in and out of the UK’
  • ‘Our stores in Serbia and Switzerland are very used to dealing with these issues’…
  • …referring to countries that are outside the EU but do much of their trade with the bloc.
  • i.e. All showing Lidl are still a threat to the UK mults.
#DiscounterThreat #DiscountersProfitable

Tuesday, 23 November 2021

A major first: Aldi Reveals Its Sales And Profits In Ireland For The First Time

The discounter, which has a 12.7% share of the country’s grocery market, usually wraps its Irish figures into accounts filed for its UK business. However, in an extensive interview with The Irish Times, the Managing Director of Aldi Ireland, Niall O’Connor, revealed for the first time its local revenues and profits.

Aldi Ireland’s pre-tax profit margin was 3.6% last year, compared to 2.1% for Aldi UK.

NamNews Implications:
  • A breakthrough NamNews item…a precedent for all.
  • Astonishing that Aldi have lifted the lid…
  • Hopefully this means other retailers will follow?
  • (Especially given the paragraph above on Financial sunlight…
  • …meaning retailers with UK registered HQs have to divulge Irish profits).
  • If Tesco and M&S go it will be difficult for the others not to…
#RetailMarginsIreland #EUDisclosureRules

Niall O’Connor, Group Managing Director at Aldi Ireland. Photograph: Alan Betson

Monday, 22 November 2021

Unilever Sells Tea Business To Private Equity Firm

CVC Capital Partners is buying the bulk of Unilever’s tea division for €4.5bn after beating off competition from rival private equity groups in an auction.

The business being sold is called ekaterra, which controls a portfolio of 34 tea brands, including Lipton, PG Tips, Pukka Herbs, T2, and TAZO, that generated revenues of €2bn in 2020. It employs around 20,000 people worldwide with 11 production factories in four continents and tea estates in three countries

NamNews Implications:
  • NamNews readers are familiar with the PE playbook…
  • Rivals can anticipate a new kind of competition in the brands sold off.

Wednesday, 17 November 2021

Amazon’s Just Walk Out Tech ‘Makes Every Other Grocery Store Obsolete’

Amazon's Just Walk Out technology removes the need for cashiers and significantly increases the speed at which customers can shop and exit the store. More importantly, it saves Amazon millions of dollars in labour costs annually in every store, providing a significant competitive advantage. 

“Between 2027 and 2030, Amazon has the potential to sell more groceries than Kroger. Between 2030 and 2035, it has the potential to sell more groceries than Walmart".

NamNews Implications:
  • A pointer for all retailers?
  • And if Amazon also supply the technology…
  • Watch this space…

#Inovation #WalkOutTech

Monday, 15 November 2021

Dunnes Takes Lead In Irish Grocery Market As Shoppers Prepare For Christmas

Latest figures from Kantar show grocery sales in Ireland fell by 4.8% year-on-year over the 12 weeks to 31 October as more normal trading conditions returned to the market. However, growth is still strong compared with pre-pandemic levels and sales were up 8.9% versus the equivalent period in 2019.

Emer Healy, retail analyst at Kantar, commented: “October brought the full easing of Covid-19 restrictions as well as a well-timed bank holiday weekend and shoppers have been making the most of newfound freedoms. Dining out is firmly back on the table, bringing a welcome boost to the hospitality sector as friends and families returned to bars and restaurants. With fewer meals eaten around the kitchen table, we’ve seen supermarket sales drop by 8.4% in the latest four weeks. Irish shoppers spent €86.1m less on groceries this month compared with the equivalent period last year when the nation was in lockdown.”

NamNews Implications:
  • Aldi and Lidl with a combined market share of 25.4% vs mults average of 22%…
  • …and growing at an average 12.5% vs pre-Lockdown.
  • Shows that the discounters remain a threat…
  • …especially with high inflationary pressures in the pipeline.

Friday, 12 November 2021

Johnson & Johnson To Split In Two

One will operate its Consumer Health division and the other will focus on its Pharmaceutical and Medical Devices units.

The move will see the company separate its Consumer Health business into a new publicly-traded company, controlling brands such as Neutrogena, Aveeno, Tylenol, Listerine, Johnson’s, and Band-Aid.

The Consumer Health business is expected to generate revenue of approximately $15bn this year and, following the planned separation, the new company would generate sales in over 100 countries.

NamNews Implications:
  • This move will endow each company with promotional flexibility
  • …without compromising the other.
  • Rivals need to anticipate even more focused initiatives from the separated companies.