Marks And Spencer Share Discussion Threads

[thegreatgeraldo] 27/2/2019 22:13

Must be cheaper to run a couple of warehouses stuffed with robots than several hundred shops populated by humans..... huge savings on business rates the obvious benefit, usual online v high st story.....obvious question is how much high st presence is needed......& need to make sure the customer pays all or most of the delivery cost

[loganair] 27/2/2019 22:05

For on-line shopping to have any chance of being profitable needs to be as automated as possible.

For example, I notice at my local Tesco, 5 members of staff are continually walking round the store packing bags for on-line deliveries.

This packing is not even done from the store area of the store. Staff take the items from the store area and put on to the shelves. Then a second set of staff come along to take the items off the shelves and put into bags for local on-line delivery.

Getting items from the shop to a customers home is called 'the last mile' and is the most expensive part of the process for any shop getting an item from the factory or farm to the customers home. I understand this 'last mile' costs the supermarkets as much as £20 per delivery per customer as the supermarket incurs extra costs for packing the products, paying transportation costs, wages, fuel and for the cost of the vehicle.

[nick rubens] 27/2/2019 21:59

Not sure that selling food online is a good idea as I've always thought it just creates more work for the staff to pick the shopping.

Is it proven anywhere to be profitable in it's own right? Have Ocado got some super efficient computerized auto pickers?

Aldi and Lidl don't do online and they continue to grow.

[loganair] 27/2/2019 21:39

M&S seem now to be doing with their Food as they did with their clothing.

Up until the mid 1990s M&S clothing was doing the best and most profitable of any of the clothing retailers as they understood their core customer base. Then sadly they decided to go into fashion to clothe the young which is out side their expertise and it all started to go down hill from there.

Now M&S seem to be taking the same route with their food, going for the young which is outside their expertise.

M&S need to stick with what they know best.


Ocado must be laughing all the way to the bank....what are they going to use the money M&S are going to give them...

Ocado said the proceeds would fully fund the development of all fulfilment centres it has committed to build for clients including Casino in France, Kroger in the US and Sobeys in Canada.

[poikka] 27/2/2019 21:23

I made it 4.25%. Was 18.7p x 0.6 = 11.22p @ 264p = 4.25%. I'm probably wrong - it's been a long day.

[philanderer] 27/2/2019 21:08

At tonight's shareprice with the cut dividend the yield is 5.2%

[poikka] 27/2/2019 21:03

I don't see this as doing away with MKS' high street convenience stores - unless Zoom makes inroads, and that's still just an experiment.

Big question is: how big is the average MKS' online basket. I can only assume that MKS' have thought about that - pretty obvious - and with better pricing and a higher profile, baskets should be bigger. At the moment a lot, if not all, of their "minimal" online shopping is picked instore, whereas in the future it'll be done by robots at Ocado's. Anyway, MKS' food sales are some £5bn - I think it was; so I can believe their £70 synergies predictions.

Could be that Ocado might add clothing to that - but that doesn't mean that folk'll order a pair of socks at the same time as they order the pork, as someone suggested.

Would I have done this deal, with what little I know about matters non-maritime? Probably not: I'd probably have stuck to my knitting, as it were. They're already becoming less precious with their food offering, and it's seeing sales improving where they are changing. I kinda believe that convenience is where it's at for MKS; although that's probably where rents are hurting most, but you'd think that with the high street changing and diminishing atm, they'd have a bit more clout.

But then, this wasn't just dreamed up as a way of wasting our money; so I'll go along with them.

Must dash.

[diku] 27/2/2019 21:03

M&S is or was popular for their undies...right?..The plan is to deliver undies with the food...hence this Ocado deal!!...

[philanderer] 27/2/2019 21:00

scobank , I'd have thought the MKS management would have sounded out the large institutional shareholders but who knows ? Most opinion today seems to be MKS is overpaying big time.


'This is why the pricey Ocado deal is unlikely to deliver for Marks & Spencer'

[scobak] 27/2/2019 20:46

Perhaps I am not fully up on company law, but do the shareholders not get a vote on this. Don't quite understand how this can go through on the 'nod'.

[mike_miikke] 27/2/2019 19:02

I wonder what Waitrose will be thinking about all this?

[mrfixituk] 27/2/2019 18:06

Do any retailers make a profit from online deliveries? I thought it was loss making. Ocado themselves haven't. The USP for them is technology. I don't think this will help much

[danny baker] 27/2/2019 16:58

I've closed my short today. Strategically I think the deal gets M&S out of a mess. Simply Food was touted as a great growth story 2 years ago and they even considered floating it off as a separate business. However Simply Food wasn't scalable profitably and rightly they halted expansion plans. Having a competent online offering will allow MKS to close dozens of stores and accelerate its transformation. Another nail in the coffin for the high street.

[philanderer] 27/2/2019 16:19

One thing is for sure .

If you were long MKS this morning at the open it has been a sh1te day.

[spob] 27/2/2019 16:15

" mks claim synergies of £70m by year 3 alone "

I don't beleive that for one minute

just my opinion though

[bor491] 27/2/2019 16:01

Debt is real though! tell that to the shareholders whose dividend has been halved and will be asked to pay an extra 700 or face dilution. It is very easy to spend millions when the money isn't yours!

[careful] 27/2/2019 15:46

the company has been reduced by almost £600m today because of a £700m deal.
great longterm potential.
mks claim synergies of £70m by year 3 alone.

markets are innumerate.

[suetballs] 27/2/2019 15:38

Bought a few this pm.
Suet

[loganair] 27/2/2019 15:37

If M&S had been with Ocado last year they would have made £34mln which means it will take them 22 years to get their original investment back...I do not call that a good investment by M&S.

[avidacre] 27/2/2019 15:34

We need a clear out of top management. Not pals together. Look a clothes, like a market stall. Food covered in plastic. All pasta - 90 %. No substance.