Future of tesco, morrisons

2010

Glen_Clark wrote: »

Perhaps the price will recover a bit.

It ain`t over yet and don`t try to catch a falling knife.
You don`t turn a super tanker around overnight no matter who you are.
More pain after each 12 weekly update.
The only way the share price will improve is when sales and profits improve.
Pencil in 200p for value.

antrobus

Scarpacci wrote: »

I struggle to see where Ocado will find other supermarkets to whom it can provide its services.....

I've always detected a whiff of techno-BS about all those claims about Ocado. Lo and behold there is a report in the FT under the headline 'Ocado slides amid earnings doubts' noting that one analyst has established that they only have "one relevant European patent" - for some kind of robotic arm, which in any case relies on somebody else's automation system.

Scarpacci wrote: »

...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?...

You mean, how many supermarkets are there who have made such a cack-handed mess of their online strategy as Morrisons? Not many, I suspect.:)

Scarpacci wrote: »

..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....

Depends on the terms of the Morrisons deal. I was under the impression (ie I read something somewhere) that Morrisons had an exclusive deal for the UK.

Scarpacci wrote: »

....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?

No takers as yet.:)

One of the issues as I understand it, is that 'click and collect' is more the norm in Europe, (although it's getting more popular in the UK), and Ocado can't do click and collect because it doesn't have anywhere to collect from.

Scarpacci wrote: »

..That said, I suppose Ocado could always just enter other markets as Ocado.com.

They could. But they'd need lots more capital. The potential providers of such capital might well want to wait and see whether they can actually make any money out of the UK first.

Thrugelmir

bowlhead99 wrote: »

We'll have to see whether Tesco boost the final dividend to 'catch up' the effect of cutting 75% off their interim dividend as announced today:

Unlikely as they've slashed capital expenditure as well. So there's insufficent cash being generated to fund the dividend. That's the nature of high yielding shares. When trouble strikes there's unlikely to be sufficient income reserves to continue funding the same level of payout.

bowlhead99

Yes, I guess I wasn't literally thinking of the final dividend being raised, just not being cut quite so heavily as this one - resulting in the overall divi for the whole year being "slashed" by less than the 75%.

I've made the point before that the supermarkets being outliers in the FTSE for historic divs versus current prices is not a good decision-maker for an investor, as market consensus was for future divs to reduce. Particularly for Morrison's whose board had only committed to preserve the div for the next year at what appeared a low (maybe under 1x) coverage ratio on projected profits. They've fallen today as their investors see the reality of the sector environment hit home on the Tesco RNS.

2010

Massive volumes today over 72 million traded to date and down to 230p.

Minrich

2010 wrote: »

Massive volumes today over 72 million traded to date and down to 230p.

So for there to be sales there must have been purchasers ?

So who is buying them ?

2010

Minrich wrote: »

So who is buying them ?

People who think the bottom has been nearly reached.
Optomists!

115 million traded at close and maybe a few more after, 228.7p.

vectistim

My main problem with Tesco is that the fruit and veg has become too expensive which pushes me elsewhere for those, and then I don't bother with the rest of the stuff. (Having said that I'm going there this evening, mainly for convenience, as it's my local)

DCFC79

Rollinghome wrote: »

On the shelves were piles of empty boxes and the checkout assistants were literally standing on crushed groceries piled beneath them that customers had changed their minds on and left. It's not store refurbishments they need, it's a few brooms.

Brooms to get rid of the carp and some of the staff who could do better.

Minrich

Managers take no notice of lower level staff , my wife has worked for them part time for 20 years , 20hrs a week and she tears her hair out sometimes . There really is something amiss with the business , we shop in other places even though we get 10% staff discount . We have always done it but i don't always agree with some of the comments made about Tesco products and prices . Tesco will bounce back but when and how i do not know . They employ 500,000 people so are a really really important part of our country . Sad that people in this country choose to support German companies ! We are a terrible country for supporting our own , we are only too keen to put them down and say bad things about them . This should be something the new CEO should think about with Tesco .