Sainsbury (j) Share Discussion Threads

[albert3591] 27/2/2020 15:08

All supermarkets suffering today.

[loganair] 27/2/2020 09:57

Walmart is in talks with private equity firms about selling a majority stake in Asda. The US retail giant confirmed the talks in a statement, although it also said that “an IPO is an attractive long-term objective for Asda”. With Asda valued at around £5bn on a standalone basis, a full takeover would probably require a consortium, with a stake sale to a private equity house seen as a stepping stone to a flotation in a few years time. KKR is one name in the frame.


The original £7.3bln that Walmart valued Asda at at the time of the take over bid by Sainsburys would now value Asda approximately the same as Sainsbury's and M&S combines which is just a ridiculously high valuation.

What I see happening is the following:

1. Private Equity firm takes majority stake in Asda.

2. Private Equity firm asset strips Asda and loads Asda with a huge amount of debt paying a huge dividend to both the Private Equity Firm and Walmart.

3. Private Equity firm lists an over valued Asda carrying a huge amount of debt - shares being bought by the Private Retail Investor because they think they are buying a safe company - This is what happened with Woolworths and Debenhams etc.

4. In the end Walmart get the £7.3bln they wanted for Asda and the Private Equity Firm also makes a huge amount of money, doubling there original investment with in a few very short years.

[loganair] 26/2/2020 19:31

Asda has attracted interest from suitors including private equity firms, the people said, asking not to be identified because the information is private. Walmart is working with an adviser and has recently started a formal process for the stake sale, the people said.

[loganair] 26/2/2020 19:28

I would be surprised if anybody is going to offer the £7bln plus Walmart had valued ASDA at during the take-over/merger with Sainsburys.

[loganair] 26/2/2020 19:22

BBC - Walmart in discussions to sell stake in Asda:


Walmart says it may sell a majority stake in Asda, its UK supermarket, after "inbound interest" in the idea.

The US retail giant said it was talking to a "small number of interested parties" about a possible investment.

It comes after UK regulators blocked Walmart's plan to merge Asda with Sainsbury's last year on fears it would raise prices for consumers.

Walmart said it would be likely to retain a stake in Asda if the plan moved forward.

"No decisions have been made and we will not be commenting further on these discussions," it said.

"If or when we decide to pursue this opportunity further, our first priority will be to share more detailed information with our colleagues."

Walmart purchased Yorkshire-based Asda in 1999. The company is among the top three supermarkets in the UK, with an estimated 15% of the market.

However, in recent years, it has seen increased competition from low-priced German competitors such as Aldi and Lidl.

'Clear strategy'

After regulators blocked the Sainsbury merger, Walmart said it was considering a stock market flotation for Asda.

On Wednesday, the firm said that remained "an attractive long-term objective".

"Asda is a great business with a clear strategy for the future and Walmart is committed to ensuring it has the resources and support it needs to deliver that strategy," Walmart said in a statement.

Walmart has overhauled its international strategy in recent years, scaling back its business in countries such as Brazil while partnering with local firms in markets where it sees growth.

In 2018, it took a majority stake in India's online retailer, Flipkart. It also has partnerships with China's JD.com and Japan's Rakuten.

"Walmart has a clear international strategy around 'strong local businesses, powered by Walmart' - which involves a number of different ownership arrangements, depending on the needs of its different markets," the company said.

A potential third-party investment in Asda would be intended to "support and accelerate the delivery of Asda's strategy and position Asda for long-term success", it said.

John Colley, associate dean of Warwick Business School, said: "Having pinned all their hopes on a merger with Sainsbury's, bosses at Asda have struggled to find a Plan B for the business.

"The company is clearly not wanted by Walmart, which is occupied with greater challenges such as the threat of Amazon."

He said a flotation had "always seemed improbable", but the idea suggested that Walmart had been "struggling to find potential buyers at a price it found appealing".

[poikka] 26/2/2020 17:35

Berenberg upgrades to Buy - fwiw.

[mattjos] 25/2/2020 23:26

Sold all my profit share stock and my senior management options in JS back in 1998 at somewhere around £5.75 ... left JS in 1999 ... shares have gone nowhere ever since for the simple reason that no one there has any vision for the future whatsoever.It has been downhill ever since Sir John Sainsbury stepped back from the helm.David Sainsbury was a total disaster for the company and all subsequent leadership hopeless.I still shop there, most competitors ghastly shop experiences (Tesco, Lidl, Aldi, Asda, co-op, Morrison's .. full of the great unwashed. Marks & Waitrose insanely expensive) but, as an investment proposition? JS continues to gradually wither away. The founders would not countenance any of current management.

[poikka] 21/2/2020 17:28

Guess that they'll be looking for alternative suppliers, spob, amazing just how quickly suppliers can be changed. If there is a general shortage, prices would rise, I guess; so no change?

I dunno.

[spob] 21/2/2020 14:45

I wonder what effect the China shutdown is having here

I think they import most of their General Merchandise directly from Chii-naa

[demonboy] 13/2/2020 11:37

https://www.retailgazette.co.uk/blog/2020/02/sainsburys-launches-new-on-the-go-convenience-stores/

[poikka] 12/2/2020 11:10

And here's the above, again.

"(Alliance News) - J Sainsbury PLC on Wednesday said it is looking to capitalise on a "growing trend" for fast, convenience shopping by opening 10 smaller format stores in the UK.

The first "On the Go" site is to open at Mansion House in the City of London. The grocer said it will launch nine more in London, Edinburgh, Bristol and Glasgow.

Elsewhere, the company said it has 130 of its "local" format stores in urban areas which could be converted into On the Go sites.

"The On the Go stores tap into the growing trend for convenient food to go. According to IGD, the UK food to go market is forecast to be worth GBP23.4 billion by 2024, up from GBP18.5 billion in 2019, growing by 26%.

"The stores will help Sainsbury’s maintain its market-leading position in convenience. For the last five years Sainsbury’s convenience stores have outperformed the market in terms of trading intensity and around nine million customers visit Sainsbury's Locals every week."

The new format stores will also "puts a spotlight" on its general merchandise arm, which includes the Argos catalogue retailer and the Tu clothing brand.

Sainsbury's Director of Commercial Operation Graham Biggart said: "Convenience is a growing part of our business and we have greater capability than ever to truly tailor Local stores to local needs – across our products, formats, services and operations.

"Our new On the Go Mansion House Local is a great example, bringing a new kind of convenience to busy local workers with limited time and delivering the curated range and fast experience that will enable them to get exactly what they want at pace. We're confident this format will further strengthen our market-leading position in convenience."

In September, the company said an internal review resulted in plans to launch 10 new supermarkets but close between 10 to 15."

[poikka] 04/2/2020 13:00

I think that we know that by now, thanks loganair.

[loganair] 04/2/2020 11:10

Kantar give false representation of grocery market share as they never include M&S in their figures which has around 3.3% share of the grocery market.

[poikka] 04/2/2020 09:57

According to Kantar, Ocado was the fastest growing grocer in the 12-week period with its market share increasing by 0.2 percentage points to 1.4%. Sales at the online grocer jumped 11% year-on-year to GBP397 million from GBP357 million.

Fraser McKevitt, head of retail & consumer insight at Kantar, said: "Ocado was once again Britain's fastest growing grocer with sales 11.2% higher than this time last year. More than half of the online retailer’s sales come from customers in London and the South of England, but its quickest growth is actually found outside of this heartland in the North of England where its sales were 17% higher than the same time last year.”

Among the big four retailers, J Sainsbury PLC's was again the best performer as its sales fell by 0.6% to GBP4.61 billion in the 12 weeks and its market share declined marginally to 15.8% from 15.9%.

Tesco PLC, the country's biggest supermarket, saw its market share dipping to 27.3% from 27.7% and sales declining 0.9% to GBP7.99 billion. WM Morrison Supermarkets PLC market share slipped to 10.3% from 10.6%, with sales falling by 3% to GBP2.99 billion from GBP3.09 billion last year.

Walmart Inc's Asda saw its market share decline to 14.9% from 15.3%, with sales down 2.2% year-on-year to GBP4.37 billion from GBP4.46 billion.

Aldi's market share grew to 7.9% from 7.5% and sales rose during the 12-week period to GBP2.29 billion from GBP2.17 billion last year. Lidl's market share increased to 5.9% from 5.3% and the discounter's sales were up 11.1% to GBP1.72 billion from GBP1.55 billion.

Co-op sales were up 2.7% year-on-year to GBP1.76 billion from GBP1.71 billion and market share edged up to 6.0% from 5.9%.

Iceland sales climbed 1.4% to GBP676 million and its market share remained flat at 2.3%.

Waitrose & Partners sales slipped 1.5% to GBP1.47 billion in the 12 weeks and its market share declined to 5.0% from 5.1%.

Kantar said grocery inflation stood at 1.0 in the period, with prices rising fastest in markets such as bacon, sausages and cooked meat, while falling in butter, instant and fresh poultry."

[spob] 24/1/2020 08:01

lidl/aldi

they are a kind of a victim of their own success

most of the lidl and aldi stores are too small now

the car parks are also too small

certainly wouldn't park my car in the lidl car park near me

and whenever I have popped in for something, the checkouts are usually so busy that I really want to dump my items and walk out

[loganair] 23/1/2020 19:25

Aldi has revealed 28 locations in Surrey 17 stores and Hampshire 11 stores where it is looking to open brand new supermarkets.

Fellow German budget specialists Lidl says it wants to open 30 stores in the Surrey.


The number of shoppers using Aldi and Lidl has risen by 50% in four years.

[loganair] 23/1/2020 11:06

Sainsbury’s boss checks out:

The departure of Mike Coupe as the boss of Sainsbury’s (SBRY) unnerved investors but AJ Bell believes his replacement Simon Roberts is well equipped to deal with ‘operational challenges’.

Retail and operations director Roberts cut his teeth at Marks and Spencer and Boots, which means he is ‘no stranger to the operational challenges facing large retailers’, said analyst Russ Mould.

‘His agenda is likely to focus on getting more out of the existing business rather than finding new things to bolt on,’ said Mould.

‘Like most retailers, the priority is to have a superior digital offering and top-notch supply chain. That is likely to involve investment in IT and logistics.’

[loganair] 22/1/2020 11:18

The appointment of the 48-year-old Roberts to one of the most high-profile jobs in British retail raises the question of whether he will further adapt Sainsbury’s strategy that was set out in September and was designed to show the group could prosper on its own. The reorganisation included the closure of up to 15 supermarkets and 40 convenience stores, as well as putting 80 new Argos outlets inside Sainsbury’s sites.

Roberts’ task will be to grow earnings in the face of softening consumer demand and the relentless march of the German-owned discounters Aldi and Lidl, who continue to aggressively open new space and win market share.

[loganair] 22/1/2020 11:17

The retail analyst Nick Bubb said Coupe had “at last paid the price for the failure of last year’s Asda deal”. Clive Black, an analyst at Shore Capital, an investment bank, praised Coupe’s tenure but said he had “materially overextended the business’s capabilities in the eyes of the regulator with the proposed Asda merger”.

[loganair] 22/1/2020 11:10

AJ Bell investment director Russ Mould said ‘deal-hungry' Coupe ‘may unfortunately be remembered for his singing rather than retailing’.

‘He did the dance with Argos and Nectar but tripped up with attempts to marry Asda and partner with Danish retailer Netto in the UK,’ he said.

‘Just when you thought being caught on camera singing "we're in the money" was a low point, the Asda merger subsequently didn’t happen and Coupe was left scrabbling for a plan B.’

'Despite such hiccups, it is fair to say that he wasn't afraid of making some bold strategic decisions, even if perhaps he should have been paying closer attention to the day-to-day running of the business,' Mould continued. 'Argos is proving to have been a good deal and recent grocery trading has been fairly resilient despite intense market competition.

'Coupe's replacement is Simon Roberts who is currently the retail and operations director at Sainsbury's. With a background at Marks & Spencer and Boots, he will be no stranger to the operational challenges facing large retailers.'

'His agenda is likely to focus on getting more out of the existing business rather than finding new things to bolt on. Like most retailers, the priority is to have a superior digital offering and a top-notch supply chain. That is likely to involve investment in IT and logistics, something that sounds very similar to Marks & Spencer's current situation.'