Supermarkets

Sainsbury’s new CEO will need outsider’s mindset

22 January 2020

The UK grocer’s operations director, Simon Roberts, will succeed Mike Coupe in June. The new chief executive’s three decades of experience in retail will be useful. But he may have to rewrite his predecessor’s plans if he wants to deliver better returns for shareholders.

French demos poor excuse for Casino earnings miss

17 January 2020

The retailer’s shares slumped after it said trading profit in France rose just 5% in 2019 – half the previous guidance. On a call with analysts Chief Financial Officer David Lubek blamed recent pensions protests. The unconvincing explanation hints at bigger problems.

Albertsons IPO would call on Cerberus’ tamer side

14 January 2020

The buyout firm may reprise plans to list the U.S. grocery chain after at least two previous tries. It’s not a bad moment to try and sell a retailer. But Cerberus is known for its tough approach to deals. After 14 years holding on to Albertsons, it may be necessary to soften up.

Tesco Christmas furore flags limits of ESG crusade

23 December 2019

The UK grocer may have sold greeting cards made by prisoners in China. The scandal shows how even firms that appear to embrace their environmental, social and governance duties struggle with forced labour. Stock prices suggest there’s not much pressure from investors for change.

Tesco CEO will bequeath a few trenchant problems

2 October 2019

Dave Lewis will exit in 2020 and leave the UK grocer in better shape than he found it. Yet his successor, Ken Murphy, has to contend with declining market share and a threat of recession. The former Walgreens Boots Alliance executive’s lack of UK food experience is a handicap.

Sainsbury’s strategy rejig is last chance for CEO

23 September 2019

Britain’s second-largest grocer failed to buy local rival Asda. Now Mike Coupe faces shrinking market share, below-par operating margins and a valuation discount to market leader Tesco. More let-downs could cost Coupe his job - or leave the $6 bln group vulnerable to a takeover.

Sainsbury’s stagnation adds pressure for new plan

3 July 2019

The UK retailer’s sales fell for the third quarter in a row. After the failed merger with Asda, CEO Mike Coupe has cut prices and invested in stores. But his strategy is not bearing fruit, and a chaotic Brexit could further hurt. Coupe needs to come up with a bolder strategy.

Casino takes baby step on road to redemption

28 June 2019

The French grocer has simplified its Latin American structure. The bankruptcy of Casino’s parent company Rallye frees it to recapture some value for investors, and offloading stakes in Latam supermarkets would cut leverage. A focused French business could be an easier sell.

Metro raid is an opening salvo in longer battle

24 June 2019

Czech and Slovak investors have offered 5.8 bln euros for the German wholesale retailer. Though they speak for more than 30% of the shares, a 3% premium looks measly. To rebuff the assault, Metro CEO Olaf Koch needs to convince sceptical investors about his turnaround.

Parent’s bankruptcy loosens its grip on Casino

24 May 2019

The French grocery giant’s debt-riddled controlling shareholder, Rallye, sought protection from its creditors. For now, Casino will keep sacrificing growth to pay large dividends to owner Jean-Charles Naouri. But a debt restructuring might eventually free the 3.5 bln euro group.

Sainsbury’s Plan B is underwhelming

1 May 2019

The UK grocer will spruce up stores and cut prices. A new strategy was needed after boss Mike Coupe’s failed takeover of Asda. But with discounters and rivals gaining ground, Coupe needs to be bolder. The risk is that Sainsbury’s keeps losing market share as competition hots up.

UK supermarket M&A will return in bargain bin

25 April 2019

The competition watchdog blocked Sainsbury’s proposed $9 bln takeover of Asda. CEO Mike Coupe has few palatable options to cope with German discounters and the revival of UK peers. Deal fever will resurface after the rot sets in and the grocer’s share price has fallen further.

Casino sales merely keep its head above water

23 April 2019

The indebted 4.2 bln euro French retailer has sold 470 million euros of supermarkets to U.S. buyout firm Apollo. The valuation looks adequate and the group’s shares are well above September lows. But leasing back its own stores will act as a drag on Casino’s recovery.

Magnit’s Lenta counterpunch has yet to connect

5 April 2019

The Russian retailer has lobbed in a rival bid for its domestic rival. Magnit’s approach is fuzzy and barely more generous than oligarch Alexey Mordashov’s swoop for a 42 pct stake in Lenta. But it might prompt minority investors to think twice about which offer they back.

TPG leaves Russian retail with a whimper

2 April 2019

A decade after first investing, the buyout group is to sell its stake in retailer Lenta to tycoon Alexey Mordashov at an implied valuation of $1.7 bln. A 12 pct return is decent enough, but still below what TPG might have hoped for.

Rare-earth bid reverts Aussie conglomerate to type

26 March 2019

After spinning off supermarkets and selling coal, $27 bln Wesfarmers is back adding to its sprawl with a $1.1 bln offer to buy Lynas. The attraction of owning the only major producer of speciality ingredients outside China is clear, but the financial and strategic cases less so.

Oligarch’s Spanish bid is lesser of two evils

19 March 2019

A takeover by Mikhail Fridman’s LetterOne could leave investors in DIA with heavy losses. But supporting the management means backing a $680 mln rights issue – almost twice the supermarket’s market value. After accounting problems and profit warnings, the former looks preferable.

Sainsbury’s antitrust riposte barks up wrong tree

19 March 2019

The supermarket chain promised to deliver 1 bln pounds of price cuts to ease fears about a tie-up with Asda. That might help its image with customers, but probably not change the regulator’s mind. Arguing that the grocery market is rapidly changing would be a smarter move.

U.S. No. 2 grocer caught in Walmart-Amazon squeeze

7 March 2019

A 70 pct profit drop in the fourth quarter and a weak outlook wiped more than 10 pct off Kroger’s value. The company is trying to keep pace with the biggest players’ store revamps, e-commerce and delivery. But with additional pressure from discounters, it’s a race against time.

Ocado will do better than M&S out of a tie-up

26 February 2019

The online specialist may sell a 50 pct stake in its retail division to Marks and Spencer for up to 900 mln pounds. That can fund investment in its fast-growing tech unit. The buyer will pay a hefty price for a delivery service that might struggle to hang onto current customers.