Walmart’s Asda agrees to UK merger deal with Sainsbury’s

U.K. food retail is set for a massive shake up as J Sainsbury and Asda plan to merge in a deal worth $10 billion, creating a new giant for the supermarket sector.

The two companies merging are the second and the third largest retailers, currently. Given the size of the two companies, regulators will have to assess whether their merger would not create market disruptions.

Kevin O’Byrne, the chief financial officer of Sainsbury’s, said: “We think this is a great combination, creating a very dynamic player in the retail market.”

“The market has changed beyond recognition in the last 10 years and even in the last three years, the discounters have doubled their share, we’ve got new entrance coming into the market that just couldn’t exist a few years ago,” O’Byrne told CNBC Monday morning.

The merger will keep both the Sainsbury’s and Asda brands. The firms said in a statement that Walmart, which owns Asda, will have 42 percent of the issued share capital of the combined business and will not hold more than 29.9 percent of the total voting rights.

They also said that the combined business will generate at least $688.62 million in cost savings and lead to a reduction in prices of about 10 percent.

According to Bruno Monteyne, European food retail analyst at Bernstein, “scale remains the most important factor in food retail profitability.”

There have been several recent mergers in the food industry across Europe, in an attempt to fight increased competition from e-commerce firms, including Amazon. “The power of purchasing has been a driver behind several recent deals within the industry,” Monteyne also said in a note Monday.

The two grocers have struggled with their sales growth, which has weighed on their ability to get cheaper deals with suppliers.

“We think if you don’t change, if you don’t evolve, if you don’t move forward in the current climate then that’s very risky,” he said. The merger “allows us particularly in a very competitive market online and with discounters to give much greater value to our customers and that’s very important,” he added.

The deal will now be assessed by the U.K. competition authorities. Bruno Monteyne, from Bernstein, said he expects this process to take about one year to be approved.

“We expect the process for the CMA (Competition Markets Authority) to take one year and to be swiftly approved, if the CMA gives clearance with limited disposals. We think the risk of higher disposals is high and a non-negligible risk of outright rejection of the deal,” Monteyne also said in the note.



Monoprix is here – through the good songs and the bad

French grocer Monoprix struck the right chord with shoppers by proving how delivery is the answer to one of the greatest ills of our time — bad music.

It’s been another weird week in retail. Monoprix proved that free grocery delivery is the solution to listening to bad music, a Walmart shopper took customer service into his own hands and Auntie Anne’s threw some salt into the fashion market.

Geico and Budweiser have taught us that humor in advertising goes a long way in making marketing campaigns more tolerable, but for reasons that probably have nothing to do with work-life balance (*cough*) the only retailers catching on are located outside of the United States.
In a move not quite as bold as Ikea’s peeing pregnancy test ad, nor quite as satisfying as the grocer’s last jab at Amazon Go, French chain Monoprix released a video advertisement centered entirely around the trials of listening to bad music. We’ve all been there: Spotify misreads our tastes and gives us Jack Johnson instead of Jack White. After a brief moment of bemused disappointment, we skip the song and all is right again.
Monoprix’s ad operates in a world where our overstuffed, grocery bag-laden hands leave us tragically devoid of this fallback, abandoning us to the mercy of whatever song crops up next. As it turns out, the ad is for grocery delivery because — barring inconvenience — listening to a bad Backstreet Boys cover is the worst form of torture the grocery chain could think of.

Hard to say whether this says more about how inconvenient carrying groceries is or how bad the music industry has gotten.

Source: Retail Dive

Walmart beats Amazon and flies to India

Walmart has launched a $ 12 billion challenge to Amazon (around € 9.8 billion). It could be formalized in the coming weeks the agreement, already under negotiation, that would bring in the hands of the US retail giant the main e-commerce of India, Flipkart.

The board of directors of the company led by co-founders Sachin and Binny Bansal, that in recent weeks had evaluated a possible acquisition by Amazon, would now be engaged in evaluating the offer, just 12 million dollars, trying to understand how much each shareholder will have to sell of their shares and what percentage will be in Walmart’s hands if the deal is concluded.

What is certain is that, if the operation was successful, the retailer would set foot in a market that is not yet fully developed, but potentially explosive, which with a billion and 300 million possible users could soon become the third largest on a global scale after the United States and China. In this way, it would gain a significant competitive advantage over its competitors, Amazon in the first place. The company of Jeff Bezos is still moving forward, investing heavily on the Asian country with 5.5 billion dollars (almost 4.5 billion euros) entrusted to the country manager Amit Agarwal in order to adapt the online platform to the demands of the local market.

Source: mffashion

Carrefour Express: 3 new stores in Milan

The development of Carrefour Italia continues, with the inauguration of three Express points of sale in Corso di Porta Romana 54, Via Maddalena 9 (Missori area) and Via Martiri della Libertà 8 in Melegnano (MI). In the stores, corners dedicated to Terre d’Italia products and organic products have been added. In the markets of Porta Romana 54 and via Maddalena 9 it will also be possible to use laundry, fax and photocopy services. The Melegnano shop, on the other hand, offers the possibility of paying with tickets restaurant or requesting home deliveries.



Little helps, big profits

Little helps, big profits

Tesco’s marketing communications director Emma Botton tells us how Tesco has made its comeback by putting the customer above all else

Last week, Tesco announced that its annual pre-tax profits are up 795% on last year’s figures as the brand enters its ninth consecutive quarter of growth. The results confirm that CEO Dave Lewis has successfully returned the company to its former glory, after its historic loss of £6.4bn in 2015.

Previously president of global personal care at Unilever, marketing-minded Lewis chose to increase Tesco’s spend on traditional advertising by 68.2% last year. Food Love Stories, created with BBH London, became the core of its creative output.

The series of films celebrates real Tesco shoppers and the recipes they cook for their loved ones. For example, foster parent Birdie shares her jerk chicken dish, which she’s been making to welcome more than 800 foster children into her home over the years.

Overseeing the campaign is Tesco’s marketing communications director Emma Botton. Contagious spoke with Botton to find out more about the supermarket’s turnaround.

What were the key decisions that Dave Lewis made when he looked to turn the company around?

The most important thing was rebuilding the Tesco brand around a clear customer proposition. It was about going back to what made Tesco great and reengaging its purpose of serving Britain’s shoppers every single day. It was about elevating that purpose so that’s front and centre of every colleague’s mind, in terms of how they’re showing up for work and how they’re making decisions.

It sounds so simple. But I bet it’s one of those things that’s hard to get everyone to stick to.

I personally think that’s what [Dave Lewis] is brilliant at. He looked at what made Tesco brilliant right from the get-go and has harnessed that, reengaging and lighting that fire. Often in business, it is about making seemingly complicated things very simple again. If you’re trying to bring cultural change, and engage 300,000 employees around something, you need to make it as clear, engaging and simple as possible.

What is the culture of the company like now?

I see a business that’s engaged and motivated by nine consecutive quarters of growth. I see a business that is far less complex, and that means speed and that people have rewarding jobs where they know how they’re adding to the bigger picture. It’s a very thrilling and energised environment.


The first time I realised things were changing for Tesco was when my mum said she’d returned to the brand after a few years of shopping elsewhere. She noticed the improvements in quality of the fruit and veg (and loves the Ripen at Home avocados).

The whole purpose of rebuilding the brand is to make customers fall in love with you. You’ve got to ensure that the range, prices, service, quality and value are all there, so that you’ve got the building blocks of being a first-class retailer. But then you’ve also got to win customers’ hearts and minds, whether that’s via different experiences or with an advertising idea that feels as though it’s really talking directly to people. There’s an art to getting that balance right, rebuilding the brand and bringing the business up at the same time. It’s no mean feat.
Can you give some examples of how Tesco has generated that brand love?

We diversify in all sorts of things, but food is a massive part of our strategic intent. As part of that, we created the Food Love Stories. They are designed to show that Tesco understands the role of food in people’s lives, and that people love to show others how much they care through food. The combination of food plus the people to whom it’s important has proved to be quite a winning combination.

Another example would be the Tampon Tax campaign. It was about Tesco doing the right thing and, again, doing the right thing for customers was one of the qualities we made our name on. Here’s a situation where, on average, women are spending £300 a year on a tax that could be questionable. Helicopter parts don’t have a tax on them, and yet women’s sanitary wear does. So Tesco said, ‘Actually, this isn’t right. We can do something about this.’


How did that process unfold?

What’s exciting, is that we were the first to do it. And subsequently a lot of competitors followed suit. But again, that goes back to what made Tesco great. Tesco was the first to think about a club card, baby changing, parent and child spaces and car parking. When you put the customer first, the right decisions follow.
How have you improved the customer experience the store?

One example is that we started offering free fruit for kids in store. We put ourselves in the shoes of a parent walking around the store with small children, pestering for sweets and fizzy drinks. We’re making sure there are healthy things available and have now given away 50 million pieces of fruit.

Wicked Kitchen – a range of ready meals and food-to-go that’s plant based – is another great example of innovation. It has been a phenomenal success. It’s a great opportunity as more and more people are looking for different choices. Now, it’s not just for vegans – there’s a lot of people who are choosing to do things like only eat meat two days a week.

When you’ve got both food and the customer at the heart of your strategy, these innovations and opportunities present themselves quite quickly.
What have you learned during your time at Tesco so far?

I think putting the customer at the heart of the business is a fantastic filter for your decision making. It doesn’t mean that life and business is easy, but it does make it easier. Because your choices are: is this helping us serve Britain’s shoppers a little better every day, yes or no? And if it’s a no, you’ve really got to question why you’re doing it.