Future of tesco, morrisons

planteria

Minrich wrote: »

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 .

what part of the country are you in? OneStop is based not far from where i grew up.

and i must say it does seem as though you are setting yourselves up to be Very reliant upon the future success of Tesco. i think you will be right. but spreading yourselves a little thinner could still be a wise move.

antrobus

Minrich wrote: »

But they are going to build houses on the acres of redundant retail space ? ...

It's not so much that they're going to build houses on the acres of redundant retail space, but more the fact that they're going to build houses on the acres that they've decided that they're not going to use to add more retail space.

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

Do you know this for a fact, or are you just guessing? Got any facts to back up those claims?

Ocado recently announced a profit. Tesco's online operation is two and a half times the size of Ocado, so I'd bet they've been making a profit on it for sometime.

If you think that Tesco is actually losing money on it's 2,400 odd convenience stores, you've got a couple of screws loose somewhere. Even the Co-Op manages to make a profit out of its convenience store chain.

planteria wrote: »

.... What i'm not clear on is how much Aldi and Lidl are 'part of the same system' when it comes to sourcing food.....

I don't know for certain. But I have no reaon to suppose that they're any different from anybody else. If you or I were to open a chain of 500 or so shops selling groceries and wanted to sell a range of own brand products, there would be only a limited number of suppliers that one could approach in each product category that would be capable of supplying us.

planteria wrote: »

...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.....

That's why I said "seemingly redundant". It's just the way things look at the moment. Tesco might well find some ways of making the space pay in due course.

planteria wrote: »

..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.

I'm an Ocado skeptic myself. Somebody will probably buy them sometime. Amazon maybe. Or Morrisons.

buglawton

Ocado does not sell groceries for home delivery or otherwise. It sells a logistics service to more than one supermarket chain. Which may explain why it's started turning a profit.

Scarpacci

buglawton wrote: »

Ocado does not sell groceries for home delivery or otherwise. It sells a logistics service to more than one supermarket chain. Which may explain why it's started turning a profit.

Ocado's original and main service is the selling of groceries to people. Ocado.com is an online supermarket and even features some Ocado own-brand products, it's not all that different from a sales point of view to Tesco or Asda's service.

Ocado has recently gone a step further and begun licensing this out to Morrisons, but they look to be only commercial partner. Who's the more than one supermarket? It seems to be just Morrisons.

Ultimately the bread and butter of Ocado is, well, delivering bread and butter from their warehouses to somebody's door - many of them retail customers of Ocado.com. With the launch of Morrisons.com, more of the customers will be shoppers there instead of Ocado, but it's still relatively early for that deal.

buglawton

Ocado's latest venture is a partnership with Carrefour the French supermarket chain.

All of the improved stock market valuation is on Ocado's logistics expertise.

planteria

yes,

but "Ocado does not sell groceries for home delivery" is not true.

Minrich

planteria wrote: »

what part of the country are you in? OneStop is based not far from where i grew up.

and i must say it does seem as though you are setting yourselves up to be Very reliant upon the future success of Tesco. i think you will be right. but spreading yourselves a little thinner could still be a wise move.

Suffolk

We decided to have a limit of around 25000 Tesco , we are buying shares (You know what i mean , not really buying !) at the rate of £250 a month and the option prices are all over £2.80 , so decided to get them at £2.46 NOW with other cash . The £250 a month we will just bank as cash when they mature every year . We will continue to take on new SAYE options as the price is reduced in the first place then at the end of the 5 year saving we either buy the shares at the cheap rate and immediately sell if they are selling higher or just take the cash . We have done it for so long that we don't even think about the £250 a month extra we could have as cash , its my wifes pension afterall .

We will then look at other shares that have a good dividend record and see whats what . Although if i am honest i hate shares !

Glen_Clark

Interesting comments about supermarkets being shorted: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11023731/Short-sellers-target-Sainsburys-on-Tesco-fears.html

antrobus

buglawton wrote: »

Ocado's latest venture is a partnership with Carrefour the French supermarket chain....

Are you sure?

There were reports in 2009 of a possible joint venture, but nothing appears to have come of it. Ocado did announce in 2011 that they were launching the Reflets de France range which was sourced from Carrefour, but that's as far as it goes, as far as I'm aware.

buglawton wrote: »

...All of the improved stock market valuation is on Ocado's logistics expertise.

Ocado was 440p in July, 600p in February. It's currently trading at about 330p. The stock market valuation has only "improved" in comparison with the 310p it hit at the beginning of the week.

Scarpacci

I struggle to see where Ocado will find other supermarkets to whom it can provide its services. Morrisons was in a unique position of having deliberately sat out the move to online in a marketplace where online was taking off. Morrisons, when it finally decided to get in on the game, needed to get in quickly and with lower cap-ex. A deal with Ocado made sense. How many supermarkets, who might wish to enter the online space, are in that position internationally? Perhaps they could muster another deal or two in the UK - maybe the discounters, Co-op or local chains might find it useful - but I really can't see that many supermarkets lined up.

In market places where online's not yet developed, I would think most supermarkets would be likely to take the same approach as Tesco and ASDA and develop their own service, likely operating from their own stores. Newer entrants could also learn from their "dark store" ideas in large cities, for example. I still question whether Ocado's centralised fulfilment can be truly competitive with the store based model. Ocado's "moat" in logistics seems fairly weak to me. Other supermarkets can build their own online services and running efficient warehouses is something every company strives to do. Do Ocado have experience and knowledge? Of course, but is it really worth that much to companies that could well develop this themselves? That said, I suppose Ocado could always just enter other markets as Ocado.com.