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Sancho Panza

Morrisons Ramps Supermarket Price War With Cuts Of 17% Across 1200 Lines

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I 5/1/14

'Morrisons has ramped up the price war between the supermarkets as the traditional Big Four, alongside Tesco, Sainsbury’s and Asda, struggle to compete with discount newcomers Aldi and Lidl.

Dalton Philips, Morrisons' chief executive, revealed that 1,200 lines across its stores would see prices cut by on average 17 per cent, in the hope that it will stem the tide of shoppers heading elsewhere.

The company has been hit hardest by the shift to discounters and recorded a dreadful set of results recently which has seen both Mr Philips and chairman, Sir Ian Gibson, come under pressure. A lack of online and convenience store presence has also left the business exposed.

But Mr Philips hit back with the aggressive price cuts, which will cost up to £300 million a year, and said parts of London will be able to order online for the first time.

Both Tesco and Asda have also announced price cuts but Morrisons has become the first big supermarket to put a figure on the number of products being reduced.'

Margin compression in some of the best divi payers in the FTSE 100.This isn't exactly a sign of a strong recovery.

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I'll believe price cuts when I see them. A company press release is not a price cut!

"1,200 lines" cut, there could be double that increased!

Edited by aSecureTenant

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Considering how much all the 3 major UK food retailers saw their share price fall in the past few weeks it is interesting how little price cuts there appear to be in them since.

In fact, in the past week or so all their share prices have began to go back up.

But then we are at or near all time highs in stock markets now.

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Considering how much all the 3 major UK food retailers saw their share price fall in the past few weeks it is interesting how little price cuts there appear to be in them since.

In fact, in the past week or so all their share prices have began to go back up.

But then we are at or near all time highs in stock markets now.

That's right but I wouldn't be buying supermarkets yet. I think we could see further share price falls and possible one of the big players even going under.

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That's right but I wouldn't be buying supermarkets yet. I think we could see further share price falls and possible one of the big players even going under.

I think Morrisons is likely to go under - basically it will be bought to be cut up and sold off. It has farms and property that is claimed to be worth X billion. Some say 9 billion, others say much less. It will reach a point where it will be snatched up by some shark fund and then disposed of I think. The board did admit a few months back that it was looking for buyers IIRC.

Sainsburys is propped up by the Qartaris I think - it has the smallest margins so would be weak if it did not have rich Arab money backing it IMPO.

Tescos is a big bloated whale that needs to get lean and mean and improve both on pricing and quality but I suspect it will survive.

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Interesting. Tends to undermine the "strong recovery" meme that the media are trying to push? Deflation needs to do some work before the UK is out of this mess? To be fair to the media they had a piece on Polish workers choosing to go home this morning, supposedly salaries in Poland have doubled in ten years? A fair few BTL`ers are going to be left high and dry I think.

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Morrisons ‘heading towards an iceberg’, ex-director claims

Former director Roger Owen has claimed that Gibson must take the blame for Morrisons’ woes. In an interview with the Yorkshire Post last week, Owen, who was property director for 22 years, called the grocer a “supertanker heading towards an iceberg” and urged the group’s chairman to step down at the next annual general meeting in June. Owen further called into question Philips’ role at the company, saying that the CEO should have resigned two years ago. The ex-director also raised concerns over the future profitability of Morrisons’ online business and questioned its roll-out of convenience stores.

The supermarket operator responded by saying that Owen’s comments were unwelcome.

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Big food brands are losing pricing power

About time.

Which is where the discounters really make the difference, in most cases they do not even attempt stocking and selling main brands.

Tesco Express - Kenco 100g decaff - £3.60.

Alcafe (gold blend jobbie) at one of Aldi / Lidl, just as good - £1.69

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Supermarket sponsored food banks to follow - help to drive their share price back up! :blink:

It would be good if the supermarkets gave some of the good food they so often waste to a good cause.

Which is where the discounters really make the difference, in most cases they do not even attempt stocking and selling main brands.

Tesco Express - Kenco 100g decaff - £3.60.

Alcafe (gold blend jobbie) at one of Aldi / Lidl, just as good - £1.69

Branded food is very often no better than non branded food, but will be more expensive like for like......ok a bit of trial and error, but once found no looking back until they change the recipe, more often than not for the manufactuers/retailers benefit not the consumers, will save you a fortune over time..... people will buy the brand, the marketing and the packaging, when all we want to pay for is quality, well priced and tasty food. ;)

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It would be good if the supermarkets gave some of the good food they so often waste to a good cause.

Branded food is very often no better than non branded food, but will be more expensive like for like......ok a bit of trial and error, but once found no looking back until they change the recipe, more often than not for the manufactuers/retailers benefit not the consumers, will save you a fortune over time..... people will buy the brand, the marketing and the packaging, when all we want to pay for is quality, well priced and tasty food. ;)

Once you take away the labels then the Uk consumer often prefers the cheaper product in blind tests. On stuff like wine they think the cheap new world plonk at £4 a bottle is the expensive stuff and the French £20 chateau is the cheap crap. Not surprising really the flavonoids in French wine give it that vinegar taste, better for you, but actually tastes like s**t.

http://www.dailymail.co.uk/news/article-2504531/20-fine-wine-5-plonk-Most-just-tell--people-prefer-cheaper-bottles-blind-taste-tests.html

Edited by crashmonitor

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Inflationary!

perhaps they ought to try improving their quality as well as cutting prices.

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Interesting. Tends to undermine the "strong recovery" meme that the media are trying to push? Deflation needs to do some work before the UK is out of this mess? To be fair to the media they had a piece on Polish workers choosing to go home this morning, supposedly salaries in Poland have doubled in ten years? A fair few BTL`ers are going to be left high and dry I think.

Seems to be a lot of Merger and aquisition going on. Not sure about the supermarkets but highly regulated. Those in the city will know though. The pound is I think 1.70 to dollar. Boe sem quite relaxed to undershoot the target. Once the spare capacity gets used up ( they disagree on the MPC) they say they will raise rates. Carefully does it though.

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The big four have much bigger infrastructure and overheads compared to Lidl and Aldi. They must have plush head offices, and all those back office staff to pay for that have been growing for decades. Look at all those special offers and cardboard show material that they have to put out and change all the time. Lidl and Aldi - it's all very basic special offers in comparison. It will be a very difficult uphill struggle for the big four against a relatively new, leaner, meaner competitor.

Edited by 200p

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I think supermarkets are so competitive that their profits will trend towards zero. That's capitalism for you. Morrisons corn flakes 31p a box milk 84P for 2 litres. Who says food is expensive £1 a day is quite possible.

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I'll believe price cuts when I see them. A company press release is not a price cut!

"1,200 lines" cut, there could be double that increased!

Yes or they just put the price up the week before and then reduce it back down. I think people are finally wising up to all the tricks supermarkets play.

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Anyone come across Home Bargains?

New to a local retail park, never heard of them. So I wandered the aisles - not the full supermarket experience (food range smaller than Tesco Express), but they seem to undercut even the undercutters. Homebase and the other shops were very quiet (staff clustered round the back, red sales stickers all over the place), but HB was busy.

As a female HPCer once said, "On any visit to the supermarket, at some point the male will be found in the alcohol aisle doing a cost-benefit analysis in his head." My analysis: rubbish. But otherwise HB looks cheap and well run. Plus they do that Aldi trick where you're kept to a single aisle as you enter.

ps. I found one big price discrepancy: Homebase kitchen section had a non-stick aluminium wok for £29.99, HB for £2.99. I'm pretty sure the HB one was slightly better quality. Didn't buy either - I've got a seasoned carbon steel from the Chinese shop - £10.

Edited by okaycuckoo

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