Future of tesco, morrisons

antrobus

Minrich wrote: »

Don't accept substitutions then !

Tesco will turn around without doubt , they are still HUGE and have their fingers in so many pies . How long it takes is not really an issue for us , if they reduce the Dividend , well that would be a really big issue , afterall millions of shares are owned by their staff . Their SAYE scheme is directed at staff , they will see how many applications they get this November , but then the option price on today price would be about £2.20 , so pretty good ?

The thing about Tesco is this: two of the big growth areas in the grocery sector are (1) convenience stores and (2) online shopping. Tesco is actually quite well positioned in both sectors; it's the number one online grocer by a long way and has something like 1700 Express stores and 700 One-Stop stores. In comparison, Sainsbury's only has around 600 convenience stores, and ASDA and Morrisons have only just started.

If Tesco didn't also own acres of now seemingly redundant retail space, it would be a really hot stock and everybody would be piling in.

Minrich

But they are going to build houses on the acres of redundant retail space ? They will make large profits on that and everyday it adds to its convenience stores , One Stop are a Tesco company too , incase others didn't know , you get one of them on most estates around here . I think now that the shares are at the price they are make it a good time to invest , i have been watching the company for 20 years due to our plan to live off their Dividends and the pension they will pay to my wife when she retires . The dividend will boost her monthly money to nearly what she takes home now , if they reduced the dividend , then that would be another issue , which we couldn't do much about .

Minrich

antrobus wrote: »

The answer would be 'I don't know'. Both supermarkets and their suppliers generally keep quiet about who makes what for whom. Although I expect that the likes of Tesco have a darned good idea of exactly where Aldi gets its baked beans from for example.

However, these days we are part of a single European market, and a lot of buying and selling takes places on a Europe wide basis. For example, both Tesco and Aldi sourced their horsemeat lasagne and spag bols from Comigel in France.

Tesco have a huge backroom team looking at everything in the finest detail , there will be something forthcoming soon which will , i hope be quite game changing . There have been programmes on the TV about them , so its not as if its a secret . Also their "Clubcard" system is very clever , what the clubcard points costs them would be nice to know though . I am sure customers could do without it , we couldn't as we have had several 2 week holidays paid for from them together with thousands of pounds worth of luxury items from their 4x (Now 3x) value with Goldsmiths :beer:

Glen_Clark

antrobus wrote: »

two of the big growth areas in the grocery sector are (1) convenience stores and (2) online shopping. Tesco is actually quite well positioned in both sectors; .

two of the big lossmaking areas in the grocery sector are (1) convenience stores and (2) online shopping..Tesco is actually quite well positioned in both sectors; whilst Aldi & Lidl have avoided them both

Glen_Clark

Minrich wrote: »

But they are going to build houses on the acres of redundant retail space ? They will make large profits on that.

So what valuations do they have on their landbanks, and how much more than that can they sell them for?

Scarpacci

Glen_Clark wrote: »

two of the big lossmaking areas in the grocery sector are (1) convenience stores and (2) online shopping..Tesco is actually quite well positioned in both sectors; whilst Aldi & Lidl have avoided them both

I might grant you online, although Tesco claim be to making a profit there, but how are convenience stores a loss maker? Tesco's problem right now, outside its general market share woes, are the large stores which they struggled to find use for (they're trying pizzerias, coffee shops, restaurants, and even nail and beauty salons now). The smaller stores are a bright spot. In general, the express/metro stores are the only ones Tesco and the other big supermarkets are still opening.

There's a reason Morrisons and Asda are moving in to that territory, and I don't think it's lemming effect. Aldi and Lidl have tried these sorts of stores and may well move into that too, though it looks like there's easier pickings for them in the towns and suburbs. That certainly doesn't mean the convenience stores are the wrong way to go.

Glen_Clark

Scarpacci wrote: »

I might grant you online, although Tesco claim be to making a profit there, but how are convenience stores a loss maker? Tesco's problem right now, outside its general market share woes, are the large stores which they struggled to find use for (they're trying pizzerias, coffee shops, restaurants, and even nail and beauty salons now). The smaller stores are a bright spot. In general, the express/metro stores are the only ones Tesco and the other big supermarkets are still opening.

There's a reason Morrisons and Asda are moving in to that territory, and I don't think it's lemming effect. Aldi and Lidl have tried these sorts of stores and may well move into that too, though it looks like there's easier pickings for them in the towns and suburbs. That certainly doesn't mean the convenience stores are the wrong way to go.

Well its impossible to be precise - how much of the store rent/rates/light/heat etc do you charge to the online operation? How many of the online customers would come into the store if you stopped doing online? But common sense suggests that paying someone to pick and deliver groceries costs more than letting the customer do it themselves when you already have the stores.
As for convenience stores thats going back about 40 years to the days before they moved to big supermarkets that cut costs by giving economies of scale. OK you can charge more in convenience stores, or only stock goods with a higher profit margin, but then turnover will drop as most people will go elsewhere for their main shop.

IronWolf

I think the theory is that you do a big shop online and then convenience for fresh produce. That's what we tend to do now, get fresh stuff from the little Tesco and online shop at Ocado (much more timely than others in my experience and less substitutions as stock centrally controlled - plus they give me free delivery on Tues-Thurs)

Thrugelmir

While there's a huge focus on Tesco. It'll be interesting to see if Aldi and Lidl hit their own buffers. If I take my local Aldi for example which has grown in popularity to the point of being unusable to many. (There's a giant Tesco superstore within a 4 minute drive / 12 minute walk).

• The car park at weekends is often full
• Rarely are all the check outs open
• There's no speedy checkout system, i.e. basket only or self service checkout
• Shelves are often sparsely filled with the ailes full of cages waiting to be unloaded

On many occasions there have long queues at the checkouts, resulting in people simply dumping their shopping and walking out.

So while Tesco's etc may be in decline. They are certainly not out.

planteria

antrobus wrote: »

The answer would be 'I don't know'. Both supermarkets and their suppliers generally keep quiet about who makes what for whom. Although I expect that the likes of Tesco have a darned good idea of exactly where Aldi gets its baked beans from for example.

agreed. they will be extracting this sort of information from every salesman through the door, and on every factory visit they make. What i'm not clear on is how much Aldi and Lidl are 'part of the same system' when it comes to sourcing food.

antrobus wrote: »

If Tesco didn't also own acres of now seemingly redundant retail space, it would be a really hot stock and everybody would be piling in.

i like this idea:) that space isn't actually redundant, of course, much of it profitable, just perhaps not as profitable as some would like. i nearly bought Ocado at one stage, and missed a big spike. and you are right, tesco.com is a seriously strong leader in online grocery. i don't use it. and those above questioning it's viability are right to do so, imo. at the same time, i see it growing over time, and if anyone can make it pay, surely Tesco can.