Sainsbury (j) Share Discussion Threads

[tim 3] 07/12/2020 10:17

Agree, no problem with people with mobility issues using home delivery but the majority of people who use it are younger, often much younger and perfectly able to visit a store.No wonder we have an obesity problem in this country.

[netcurtains] 07/12/2020 09:58

TIME RICH people dont want to spend all day clicking and clucking computers - they want a good shopping experience as part of their retirement.

[netcurtains] 07/12/2020 09:56

Dont get me wrong grahamite2... I'm not talking about the frail.

I'm talking about the normal boomers: 55-75 age group.
They are, generally speaking, fit and able and relatively loaded with cash.
They are the new shopping elite and they are growing every year
for the next 15 years.

[loganair] 06/12/2020 17:48

I understand Ocado, the specialist home delivery supermarket, margins are waver thin at just 1% which is far less then Sainsbury's bricks and mortar margins.

With all the added costs over those of Ocado, I can not see how the likes of Sainsbury's are making any profit from their home delivery service.

[netcurtains] 06/12/2020 17:26

spod you said: "Some people are very busy" : answer: NOPE -
if you look at busy people in cities - 90% of them go out of their offices and buy their own lunch - they dont get it delivered to the office reception desk. So there is no rational reason for this national laziness when it comes to weekend food shopping.
In fact with more boomers retiring more people will have a lot more time to shop (most of these people are relatively rich too). Retail will be coming back big time with real footfall with real rich people.
As I said before Sainsburys needs to up its game re instore catering to make going to sainsburys for boomer pensioners a good experience - something to look forward to.
Follow the money otherwise Waitrose will take the lot!

Cheers Net.

[essentialinvestor] 06/12/2020 17:00

spob, they mentioned that in 2014, not since.

TESCO margins on their UK food business peaked around that time

at circa 5.9%, from memory.

Margins have collapsed since then.

So in other words it may be possible that around 2014 their home delivery

operation was profitable.

[spob] 06/12/2020 16:54

I don't blame customers for using the service

that's their choice

some don't have a choice, and some are very busy

[netcurtains] 06/12/2020 16:25

spod: Its nothing about profit - getting a third party to select your food is really bad for you - it should not be encouraged. EVERYONE WHO IS FIT AND HEALTHY - should at the very least select their own food they are going to consume! Its the ground zero of being a fit and able person.

I would, if I was the government, slap a massive tax on home delivery of food - if they dont we'll end up a nation of vegetables with no ideas of our own.

[spob] 06/12/2020 16:18

If Tesco says they can make a profit after all of the above costs

to be honest, i don't beleive them for one minute

they are clearly not including all of the true costs in their calculations


basically they are kidding themselves

[spob] 06/12/2020 15:53

Re 21429

EssentialInvestor

" ..how profitable, or otherwise, is their home delivery operation? ..."



You don't need Sainsbury's or anyone else to tell you whether or not online grocery delivery is profitable


firstly look at the current overall profit margins for the company as a whole

they are miniscule - always have been

then condsider all the ADDITONAL costs involved in providing this online grocery service


delivery costs

vans
drivers wages (hourly rates have gone up due to increases in min wage)
driver training costs
driver uniform costs and ppe
insurance tax mot etc
fuel
parking tickets
routine maintenance and tyre replacement costs
van cleaning costs
van accidental damage costs
van conversion costs and separate refrigeration compartments for ambient, chill and frozen goods
handsets, communication equipment and navigation equipment for drivers

picking costs

wages for online department managers and supervisors
wages for staff loading up the vans
shoppers wages (hourly rates have gone up due to increases in the min wage)
shoppers training costs
shoppers uniform costs
costs associated with covering staff sickness, pensions, staff discounts etc
shoppers equipment trolleys, handsets

infastructure costs

website costs
adapting stores to accomodate an online operation
loading bays and parking areas for vans
computers and telephone lines
additional chill and frozen refrigeration units in stores for the online operation
electricity costs for the above
maintenance for the above


Double staff costs - paying store staff to put goods on the shelf, and then paying shoppers to take the stock off the shelf again. Lol

Store inefficiency costs - where you have so many online staff picking in a store, they slow the replenishment operation and vice versa


as you can see, the list goes on and on and on and on

i am sure there is much more, not listed above


you don't need to be a rocket scientist


there is no profit in selling groceries online and delivering them to peoples doorsteps


anyone who disagrees, is either trying to kid you or kid themselves

[loganair] 06/12/2020 09:09

FTSE 100 retail opportunities:

Other UK shares that could benefit the most from a stock market recovery include retailers. Although some retail stocks may find it hard to adapt to a changing operating landscape, the likes of FTSE 100 stocks Next, Tesco, Sainsbury’s and Morrisons appear to be successfully adjusting to an increasingly online world.

All four stocks have invested heavily in expanding their online presence since the start of this year. This may provide them with dominant market positions versus rivals, which may strengthen their financial prospects in the long run. They also have deep pockets through which to further shift resources from in-store offers to digital opportunities. After a mixed year for their share prices, they could offer capital appreciation opportunities relative to other UK shares in a likely long-term stock market recovery.

[chiefbrody] 05/12/2020 19:20

Yes. Maybe more warehouses and less expensive real estate for front line shopping.Might save a few bob on business rates too. Assuming the UK government continues to yield to Amazon.

[tim 3] 05/12/2020 16:58

Good question not sure I know the answer but am pretty sure the current system of picking online orders in stores will have to change as they need to make online as cost effective as possible.More "dark warehouses" would seem likely.

[essentialinvestor] 05/12/2020 16:12

Tim, so where does this end?.

It's not sustainable to run potentially loss making

and growing home delivery operations.

[tim 3] 05/12/2020 16:11

About time they had some "instore only" offers to reward people prepared to make the huge effort involved to visit a store to shop ;)

[sharesoc] 05/12/2020 16:10

The Stockopedia report and recording from our webinar with Sainsburys on 24th Nov can be found here for full members to view:

To access the presentation, you'll need to be a full member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join here: hxxps://www.sharesoc.org/membership/

Once you've joined, you'll receive an invitation to register for our "members network" private social network, from where you'll be able to access the presentation (and presentations on 100s of other meetings). If you're already a member and have any difficulty accessing the report, please do not hesitate to contact us here: hxxps://www.sharesoc.org/contact-us/

[grahamite2] 05/12/2020 13:14

I have an e-mail from Sainsbury's promoting their Chop Chop service - order up to 20 items for delivery within 60 minutes.

[netcurtains] 05/12/2020 07:54

The way I see it, with more baby boomers retiring
each year one of the few things a pensioner likes
to do is SHOP in real shops. Thus, gut feeling is
retail is coming back. Its just a matter of holding
on.
Someone born in 1955 is 65 now. The UK baby boom was
from about 1950 to 1970. So there will be more and
more people who will want to shop in PHYSCIAL SHOPS
every year for the next 15 years. And these people
are the richest people in the UK...

There is not much for a boomer to do with their time
during the 'working' day apart from eat, shop, walk.

The boomers have the TIME to shop in real shops
and the MONEY. And walking is healthy. The people
who will live the longest will be those that go out side
the most. Those who go shopping.

[tim 3] 05/12/2020 00:12

Take your point but considering 40% of their sales and growing now come from the net don't think there's any way back.

[tardelli2] 04/12/2020 19:08

You and me both .

[tardelli2] 04/12/2020 18:53

Average cost was around 27 pounds per customer 4 years ago . It has possibly come down considerably since then but hard to see it at even break even . Online has always been non profitable but the risk of losing more market share was unthinkable .