Supermarkets

Banks double down on Casino’s owner

17 September 2018

The French supermarket’s heavily indebted parent got a fresh 500 mln euro unsecured loan. That buys Rallye time to sell assets and avoid handing over its 51 pct stake in the grocer to creditors. For banks which are already on the hook, it’s an attempt to avert a messy collapse.

Bondholders face risky last bet at Casino owner

6 September 2018

Credit markets are growing increasingly nervous about Rallye, the indebted parent of the French grocer. Luckily, owner Jean-Charles Naouri can draw on bank lines to repay debt. But the more Rallye borrows from lenders, the fewer assets will be left if it eventually collapses.

Alibaba channels old-school conglomerates

23 August 2018

Quarterly sales at the Chinese e-commerce firm soared 61 pct to $12 bln, but earnings were flat compared to a year ago. That's due to investments in cloud computing, supermarkets, video streaming and other bets. Alibaba's unwieldy mix of businesses may merit a valuation discount.

Hong Kong death offers humbling reminder to CEOs

21 August 2018

Shares of snack store operator CEC doubled following news that its founder had unexpectedly died. Research suggests such investor reactions are common, albeit usually less dramatic. Boards and bosses often contribute less value than they otherwise might think.

Walmart sharpens as Amazon efficiency edge dulls

16 August 2018

The $270 bln retailer increased quarterly sales 4 pct. That pales next to its Seattle rival’s latest 39 pct rise. But Walmart’s workers are as productive as ever while Amazon is employing many more, and getting less in return, as it expands stores, warehouses and distribution.

Collapsing deals point to tired M&A bull market

9 August 2018

Tribune and Rite Aid terminated plans to sell themselves after shareholders and regulators objected. Perceived double-dealing also played a role. But crummy transactions falling apart is to be expected from a late-stage of a merger cycle that has run its course.

Casino shares go wrong way in risky debt punt

8 August 2018

The grocer’s shares fell 9 pct after an analyst flagged its related party deals. A sinking price may force its indebted parent to pledge stock to repay bonds, which could end up on the market. Investors have more to worry about than a grim outlook for French supermarkets.

Amazon’s growth is leaving the shop behind

26 July 2018

Jeff Bezos's outfit gets only about half its revenue from its online stores, down from two-thirds two years ago. E-commerce is growing, but the businesses Amazon has built around it are expanding faster and producing much more profit. That makes its valuation a little less crazy.

Supermarket buying pacts dodge primary problem

16 July 2018

Alliances to pool purchases, like one signed by Carrefour and Tesco, have in the past boosted grocers’ operating margin by up to 1.5 percentage points. Wringing savings without all the hassle of a merger is great. It does less to stop Aldi and Lidl grabbing market share.

Rotten food is least of UK grocers’ Brexit worries

11 July 2018

British supermarket operators worry that failure to reach a deal with the EU would see goods stuck at the border. More serious is the prospect of tariffs on imports from the bloc. That would leave them scrambling to protect thin margins and their market share from foreign rivals.

Carrefour tin ear puts fat cats in Macron’s sights

18 June 2018

The supermarket’s ex-boss forwent part of a 13 mln euro payoff after pressure from the French government. It shows that the ex-banker President Emmanuel Macron is no slave to laissez-faire economics. His move to liberalise firing rules makes corporate excess a legitimate target.

Casino sell-off is part of a bigger debt gamble

12 June 2018

The French supermarket is selling 1.5 bln euros of assets to pay down loans. Controlling shareholder Rallye relies on dividends to service its own heavy debts. The risk is Chairman and CEO Jean-Charles Naouri is running the grocer for financial needs higher up the food chain.

Morrisons can pilfer from larger rivals’ trolley

7 June 2018

The merger of J Sainsbury and Walmart-owned Asda leaves the UK grocer in a distant third place. Boss David Potts could counterbid, but drumming up similar synergies looks tough. Better to lobby against the deal, and grab market share and the best shop locations if it goes ahead.

Viewsroom: M&A gets carried away

3 May 2018

Dealmaking is breaking records. But more tie-ups are being pulled. And recent proposed unions like T-Mobile US with Sprint and Xerox with Fujfilm come with regulatory or boardroom drama. Crisis throwbacks and the careless brag-song of Sainsbury’s CEO are sending warning signals.

Sainsbury’s shows need for new antitrust approach

2 May 2018

The grocer, which is buying Asda for 7.3 bln pounds, wants UK competition authorities to vet retail mergers in a new way. The rise of discount rivals and online sales means it has a point. A revamp of the metrics used to make sure shoppers have enough choice looks inevitable.

Sainsbury’s tries to succeed where Walmart flopped

30 April 2018

The UK grocer is buying the U.S. giant’s Asda subsidiary for 7.3 billion pounds in cash and stock. Even after passing on some cost savings to shoppers, Sainsbury’s could make a double-digit return on investment. Unless demands from competition authorities eat into the benefits.

Sainsbury’s and Walmart test UK merger taboo

28 April 2018

Britain’s second- and third-largest grocers plan to merge, with Asda’s U.S. parent as the junior partner. Joining forces is a logical response to the threat from Amazon and rival Tesco’s tie-up with wholesaler Booker. Still, it’s an audacious challenge to competition authorities.

Tesco’s turnaround may bring forward regime change

11 April 2018

Three years after an accounting scandal and price war, the grocer is improving margins and cutting debt. It’s the least shorted of all British supermarket stocks. Boss Dave Lewis’ revamp looks within reach. The question for investors is whether he’ll stick around to finish it.

Dutch lawmakers give Ahold backup in activist spat

10 April 2018

Activist CIAM wants the supermarket to scrap its foundation that can be used to block takeovers. But with the Netherlands eyeing new laws to stymie hostile bidders, companies may not need these arcane tools much longer. Shareholders will suffer either way.

Booker boss is pied piper of Tesco deal

28 February 2017

The UK wholesaler’s shareholders approved Tesco’s 4 bln pound takeover, despite a slim premium and activist calls for a beefed-up price. Booker CEO Charles Wilson will work on finding synergies with Tesco. A history of stellar returns made investors willing to follow his lead.