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Morrisons May Sell 10% Of Properties To Appease Shareholders


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HOLA441

http://www.theguardian.com/business/2014/jan/12/morrisons-sell-properties-appease-shareholders

Morrisons is reported to be considering selling off up to 10% of its properties to appease shareholders after bad tidings over Christmas trading.

While the supermarket chain has traditionally made store ownership a key plank of its business, owning about 90% of its stores, shareholder pressure from has pushed the company to consider selling off and leasing back some of its £9bn property portfolio.

Morrisons chief executive Dalton Philips is to report on plans in March, after conducting a review whose findings will be of more intense interest after its recent struggles, including a 5.6% decline in Christmas sales. Hiving off just a tenth of its freehold assets could raise up to £800m, with a large chunk potentially returned to shareholders in dividends.

Well this idea worked brilliantly in the pub trade and why not pay rent on something you already own, seems win win.

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Isn't this precisely why Tesco is up to its neck in the brown stuff .. it was a great wheeze to boost short term profits by selling off the portfolio and renting it back. Now they have to pay a fortune in rents.

Meanwhile Waitrose still own their sites freehold - result is that everyday stuff is now frequently cheaper in Waitrose, branded stuff is price-matched, and Tesco is basically stuffed.

Great business model :lol:

Edited by montesquieu
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HOLA445

Isn't this precisely why Tesco is up to its neck in the brown stuff .. it was a great wheeze to boost short term profits by selling off the portfolio and renting it back. Now they have to pay a fortune in rents.

Meanwhile Waitrose still own their sites freehold - result is that everyday stuff is now frequently cheaper in Waitrose, branded stuff is price-matched, and Tesco is basically stuffed.

Great business model :lol:

Yes...good post.

And Tesco is the one to look out for, continually raising prices is no kind of business model but it seems to be the corner that they`ve painted themselves in to. I wonder if there`s any lessons for the Great British government here? As goes Tesco so go we all.

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Amazed that any of these cartel grocers could be in trouble.

Despite their economies of scale and superior credit, they charge 50-80% more on stuff you can get in any Asian store on the high street. Plus the local fruit 'n veg shop is half price for equal quality and no plastic.

Maybe tax credits factor in for the little guys, but the state treats the monopolist grocers with as much privilege as the banks.

And still customers refuse to calculate the price of convenience. Same with the energy cartel.

Mind you radio news announced today that Tesco customers "feel" that the superstores are too big. Need to pack space with restaurants, gyms etc. Signal for sell off?

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HOLA449

Isn't it just a tax dodge?

Give that man a cigar.

The new property owners will be registered in the cayman islands and will charge so much in rent that morrisons profits will be zero for tax purposes. They are hoping to be as non profitable as tesco's

The new company that is registered in the cayman islands will of coarse be owned by Morrisons.

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morrisons car park is really handy for shopping aldi.

4pint milk is £1 in aldi and its £1.49 or something in Morrisons. so i do my shopping in aldi first then morrisons to get things i missed or don't like in aldi.

A few years ago they tried to clamp down on parking with a new electronic car clock in system. turned morrisons shop in to a ghost shop with very few customers. Lasted about 3months and they took it out.

i don't mind sainsburys, asda , aldi or morrions but i could not shop in tesco or lidl .

They tesco expressed the small to medium size tesco and i stopped going in there when they did it. i don't really know why. Lidl major problem is that you cant get out unless you go through the till and buy something and they are so slow getting served. If you want to get out you have to do limbo dancing or step over barriers.

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HOLA4413

The reason Morrisons went for Safeway back in 2005 with such gusto was because that firm already owned freehold most of it's stores.

It was key to the continued success of the organisation, Safeway was a competent profitable business at the time but lacked ambition. It was not making as much profit as the others and became ripe for takeover when the shareholders demanded more.

If Morrisons go down this route then it will be the beginning of the end for them.

The large store format is pretty tired anyway. Shoppers in their droves are looking for value hence the meteoric rise of Aldi/Lidl and a few others.

2013 will be remembered as the year it all went Pete Tong for the large food retailers......

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HOLA4414

Will any of it make Aldi's carparks bigger?

Ours has introduced time restrictions - there'd be loads of room if they'd not built a KFC on one of the carparks.

New Aldi rammed yesterday (Sunday). Cars couldn't get into the carpark and were starting to block the main road! Also a LOT of expensive cars.

Anecdotally, some people I know who were sniffy about shopping at Aldi aren't anymore.

Quality and price have won them over, shocking Tesco quality pushing them.

Need some Tescos converted into giant Aldis.

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HOLA4415

Will any of it make Aldi's carparks bigger?

Ours has introduced time restrictions - there'd be loads of room if they'd not built a KFC on one of the carparks.

We went to the Aldi that has just opened near us, 3 shops on the it in total and a tiny carpark. It seems to be the one major issue Aldi and of course the fact they don't take credit cards.

Edited by interestrateripoff
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It still won't remedy the problem that in store after store the actual experience of shopping in Morrisons is all too often rather unpleasant and nasty.

Around here they're the best supermarket by some way. Ahead of Asda or Lidl and far, far, far ahead of Sainsburys, Coop and Waitrose.

Around where my parents live, they're a "never again" experience, way behind Tesco, Asda, Waitrose and Lidl.

Conclusion: don't generalise too far from what you see locally!

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HOLA4417

Around here they're the best supermarket by some way. Ahead of Asda or Lidl and far, far, far ahead of Sainsburys, Coop and Waitrose.

Around where my parents live, they're a "never again" experience, way behind Tesco, Asda, Waitrose and Lidl.

Conclusion: don't generalise too far from what you see locally!

Having visited over 100 Morrisons stores they generally break down as follows.

1. Morrisons new build - Generally a very good experiance, better than ASDA, but not as good as Sainsburys

2. Co-op bought - dirty little hovels I'd rather shop in Lidl

3. Safeways bought - Mixture of hovels and 1/2 decent stores, but nothing outstanding

For me I have one of each within a few miles, but I'd rather pay the extra and shop at Sainsburys... maybe thats just me as a jaded ex-employee

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HOLA4418

Isn't this precisely why Tesco is up to its neck in the brown stuff .. it was a great wheeze to boost short term profits by selling off the portfolio and renting it back. Now they have to pay a fortune in rents.

Meanwhile Waitrose still own their sites freehold - result is that everyday stuff is now frequently cheaper in Waitrose, branded stuff is price-matched, and Tesco is basically stuffed.

Great business model :lol:

Tesco have done loads

https://www.google.co.uk/#q=tesco+sale+and+leaseback+deals

It's what brought Woolworths down because their rent increases were linked to inflation which rose as income dropped.

The government has done a similar thing with the royal mail pension, taking cash now that won't cover future payouts liabilities. It was the only way they could sell give it away

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I like Morrisons ;)

Morrisons is my favourite store by a mile

morrisons car park is really handy for shopping aldi.

4pint milk is £1 in aldi and its £1.49 or something in Morrisons. so i do my shopping in aldi first then morrisons to get things i missed or don't like in aldi.

A few years ago they tried to clamp down on parking with a new electronic car clock in system. turned morrisons shop in to a ghost shop with very few customers. Lasted about 3months and they took it out.

i don't mind sainsburys, asda , aldi or morrions but i could not shop in tesco or lidl .

They tesco expressed the small to medium size tesco and i stopped going in there when they did it. i don't really know why. Lidl major problem is that you cant get out unless you go through the till and buy something and they are so slow getting served. If you want to get out you have to do limbo dancing or step over barriers.

I bet you 2 litres of milk from Morrisons costs 97p farm foods is cheaper at £1.60 for 4 litres

aldi is cheaper than morrisons for milk £1 for 2.27 litres not a lot in it though.

Edited by gf3
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HOLA4420

Around here they're the best supermarket by some way. Ahead of Asda or Lidl and far, far, far ahead of Sainsburys, Coop and Waitrose.

Around where my parents live, they're a "never again" experience, way behind Tesco, Asda, Waitrose and Lidl.

Conclusion: don't generalise too far from what you see locally!

Some years ago Morrisons were at the top but are right at the bottom now in terms of the actual experience. Similarly Asda were near the top and are now 2nd bottom having deteriorated. Waitrose were very good but have declined a lot.

Tesco are at the top and are consistently good with Sainsbury's just below them. Sainsburys have declined quite a bit in recent months. M & S are usually near the top. Aldi and Lidl are consistently near the top.

It isn't an assessment based on the goods on offer or their prices or the actual buildings or the parking but rather the actual overall positive/negative experience after having shopped there and over a period of time.

It's not just a comparison between single stores (i.e. one Tesco, one Sainsbury's, one Morrisons store etc) and the value/quality of goods on offer etc is a completely separate issue.

Localities can indeed differ but Morrisons spread of stores at the bottom of the league is over quite a wide area.

Conclusion:

Don't assume. Draw your own conclusions but if there are problems appearing in several stores over a reasonably largish area then it suggests it might not be local and it could be part of a larger picture/trend. Although it's also fair to say that it's quite possible that there might still be some good local stores in some places despite an overall trend.

Edited by billybong
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