A round-up of supermarket news and gossip
SUPERMARKETS are like tower block housing. What once looked like the future now feels mired in the past and what once felt thrilling and new now seems tired.
When wondering around French hypermarkets a couple of decades ago it was easy to wish that British stores would follow suit. Today British stores are very much in on the act, but the result induces consumer nausea rather than enthusiasm.
Asda plans to double its rate of expansion in Britain to an unprecedented 20 new superstores a year in the light of the Competition Commission’s inquiry into the £130bn supermarket sector. The news came as Asda outlined plans for a £400m store opening programme in 2008 that will create 9,000 jobs through 12 new superstores and ten more Asda Living non food stores.
Asda is still a distant second in the supermarket sector to Tesco. But the monoliths keep on coming. Who really wants to live cheek-by-jowl with some monstrous new supermarket development? A little similar to airports really – where we want the convenience of cheap air travel, but we don’t want the noise.
Tesco recently attacked proposals from the Competition Commission that could curb its dominance of retailing in towns across the UK. Tesco contested that a curtailment of its expansion plans by the watchdog would effectively be a “growth tax” on success.
It has emerged that Tesco has transferred the ownership of more than 80 of its supermarkets in the UK to joint ventures domiciled in the Cayman Islands. The supermarket admitted that it helped it become “more tax efficient” but vehemently denied suggestions that it had avoided paying tax on £500m of profit from the deals.
A spokesman said “Far from avoiding tax, Tesco is a top ten UK tax payer contributing more than £1bn to the exchequer last year.”
Staff at John Lewis and Waitrose earned bumper bonuses after a sharp rise in profits. The 69,000 employees of the John Lewis Partnership share a bonus pot of £181.1m, up 18% on last year and equivalent to 20% of salary. The payout came after the group profits rose 18.7% to £379.8m.
Britain’s biggest food producer has called on the Government to free more farmland for growing wheat in an effort to combat spiralling raw material prices. Premier Foods said that further price rises on Hovis, its leading bread brand, and other everyday products were almost inevitable as food companies struggle with unprecedented cost pressures.
Morrisons took a record 11.6% share of the grocery market during February – its best performance so far.
Marks and Spencer plans to open 50 stores across Greece, the Balkan States and Switzerland over the next few years in a new franchise agreement. The retailer is investing £38m in the venture with Marinopoulos Brothers, a Greek based business.
Children caught trying to buy alcohol from one of the major supermarkets will face prosecution, it was announced recently. Any under-18 found attempting to buy drink at an Asda store will be reported to the police.
Somerfield, which is up for sale, made pre-tax profits of £26.4m for the year to April 28th 2007, according to accounts files at companies House. In the previous year it made a loss of £118.1m.
J Sainsbury has signed a ground-breaking deal to offer out-of-hours GP appointments, opening up another revenue source for Britain’s supermarkets. After moving into clothing, entertainment and furnishings in recent years, Sainsbury’s now hosts an evening and weekend surgery at a store in Greater Manchester. The company said that it hoped to be able to roll out the service to other stores, depending on the outcome of the six-month trial.
Asda is understood to be close to signing a similar deal that will see a family doctor operate out-of –hours clinics at two of its stores.
Wal-Mart has appointed UBS to explore the sale of Gazeley, the property development business of Asda.
Marks and Spencer is in trouble with the city after announcing that it was combining the roles of chairman and chief executive. Few farmers are brave enough to speak publicly about sharp practices employed by supermarkets to keep prices down and boost profits. Many say they operate in a climate of fear and risk losing business if they make any rumblings let alone lodge any complaints, according to a recent survey in The Grocer.
Gemini