Future of tesco, morrisons

Glen_Clark

2010 wrote: »

Maybe for a start they should abandon their clubcard points and use that money to cut prices.

Sainsburys scoffed at the clubcard. At that time Sainsburys was number one. By the time Sainsburys realised their mistake and introduced their own loyalty card, Tesco was well ahead of them.

I saw a similar thing at my first job as an apprentice in a local garage. The boss scoffed at the little filling station down the road when they introduced Green Shield stamps. Within a couple of years he had taken us over (and closed the petrol forecourt to concentrate on repairs and car sales). He told me that Green Shield stamps had tripled his petrol sales within a few days of introducing them.

IronWolf

I've been following Tesco for a while. They already cut rewards from the clubcard and used the savings to cut prices back in 2011. In fact is was one of the first things the then new CEO Philip Clarke did. It didn't work, sales fell.

Steve_xx

IronWolf wrote: »

I've been following Tesco for a while. They already cut rewards from the clubcard and used the savings to cut prices back in 2011. In fact is was one of the first things the then new CEO Philip Clarke did. It didn't work, sales fell.

Yes I see what you mean.


Some of this blather about Lidl & Aldi is just that. I'm absolutely certain that Tesco sales and the other majors have fallen over recent years. This has to be in part due to the fact that both Aldi and Lidl are opening shops all over the country. Therefore some of the footfall loss is due to nowt more than convenience, ie Aldi or Lidl are nearer than Tesco.

Scarpacci

Glen_Clark wrote: »

Sainsburys scoffed at the clubcard. At that time Sainsburys was number one. By the time Sainsburys realised their mistake and introduced their own loyalty card, Tesco was well ahead of them.

Tesco abandoning Clubcard would also seem to be an odd choice when Morrisons is now working on a loyalty scheme of its own, after a decade or twos' absence.

There has been some suggestion in the media that Clubcard, not just the price/discount and cost aspect of it but actually also the data it provides Tesco, is a distraction. That they're failing to identify the problem stores or the overall strategy failure because they're too busy looking at how people respond to a double points coupon on baked beans. I wouldn't agree with that at all. I don't think it's possible to know too much about their customers, even if the data (or at least the way they were interpreting it) doesn't help with the overall strategy.

Wilkins

Steve_xx wrote: »

Stock prices fall sharply on bad news and often they recover. You don't seriously believe that Tesco is a gonner? Because if they are then why wouldn't Sainsbury, Morrison and Asda be in the same boat?

I make Tesco NAV to be £1.83. On the same basis Sainsbury is £3.14 and Morrison is £2.01. Given the sp of the latter two, this indicates that Tesco have a lot further to fall before they become a value proposition. Of course, NAV includes possibly overstated property values . . .

Just heard R4 phone-in on Tesco and it was pretty negative overall.

hyposmurf

Part of the problem is that the big supermarkets try what they think are clever tricks to entise the customer into buying things at reduced price.Such as BOGOF, points and highlighting by colour or larger numbers for the savings or the max possible discounts in store.Also the over inflated costs for a week and then they cut the price in half to say they're goods are now at a 50% reduction.
Lidl and Aldi just offer lower prices over the majority of their range, less of the marketing tricks.I feel that many customers have got fed up of all the tricks to lure them in and can see through many of them, so have lost trust in the big supermarkets.

A_Flock_Of_Sheep

I am glad I dumped Tesco shares ages ago. I would be looking at a near 50% loss

A_Flock_Of_Sheep

Crumbs I wonder what sort of losses Buffet is sitting on.

kangoora

hyposmurf wrote: »

Part of the problem is that the big supermarkets try what they think are clever tricks to entise the customer into buying things at reduced price.Such as BOGOF, points and highlighting by colour or larger numbers for the savings or the max possible discounts in store.Also the over inflated costs for a week and then they cut the price in half to say they're goods are now at a 50% reduction.
Lidl and Aldi just offer lower prices over the majority of their range, less of the marketing tricks.I feel that many customers have got fed up of all the tricks to lure them in and can see through many of them, so have lost trust in the big supermarkets.

Apart from staples we buy every week we try not to buy much in Tesco that isn't discounted. I can't remember the last time we paid 'full' price for anything like tinned food, dishwasher tabs, clothes washing powder/tabs, coffee, soaps/toothpaste/deodorants and numerous other non-perishable or long duration 'use before' items - 2 for 1 on Pepsi but not on Coke, fine, we'll drink Pepsi this week.


Obviously there are some items we pay full price on but by buying ahead and keeping a separate storage cupboard we keep our costs down - currently we've got enough dishwasher tabs to last us a year I think. Sometime it works out great and we get to use a voucher on a discounted item also

bowlhead99

A_Flock_Of_Sheep wrote: »

Crumbs I wonder what sort of losses Buffet is sitting on.

At year end his 300m shares were worth about what he'd paid for them (he first bought in big around 2006 when they first started making their ill fated move into the US, bought another 1.9% of the company in 2012, but sold out about 1.4% last year). Although, the headline might say they were worth 98% of what he paid for them in USD, but he'd probably received about a third of his money back in dividends over the time so they were a reasonable investment for him.

Since then though, he'll be down about 40% in GBP, a bit less in dollars. So depending on how much he made on his exits last year and the proceeds of reinvesting his dividends elsewhere along the way, he might be down or up overall.

Tesco wasn't a top 10 stock for Buffet / Berkshire Hathaway - with only a billion pounds in it at the end of the year, it was in the bottom end of the top 15. Meanwhile they had $65bn between Wells Fargo, IBM, Coke and Amex, and $50bn+ of other investments. So, if he's now down on paper about 40% of a billion quid since that point he'll be very annoyed, but not despondent.

Your idea to get rid of the shares right after you bought them was a good move - not that buying them to just hold for a couple of months was a great idea in the first place