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Asda Sales Fall Worse Than Tesco, Sainsbury, Morrison . . .

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The Lunchless Recovery

Grauniad

Sales at established Asda stores fell 3.9% in the 15 weeks to 19 April, the worst since the UK’s second largest grocer began reporting quarterly figures in 2006. However, it is understood that the last time Asda performed so badly was back in the days ahead of its 1990s turnaround under Archie Norman and Allan Leighton.

Asda has cut prices by as much as 4% on some product categories, such as fresh meat, as it tries to bring its prices closer to those of the fast-growing discount chains Aldi and Lidl. Clarke said these price drops had resulted in increased market share.

“I can’t remember a time when our industry has seen such a dramatic change in market structure,” said Andy Clarke, Asda’s chief executive. “It’s clear the big grocers are losing market share and the discounters are continuing to grow.”

'Blimey, everyone must be Hank Marvin', said a person with knowledge of the situation.

Nevertheless, Asda has pledged to continue investing in aggressive reductions. It has developed an all-new box for half a dozen eggs which only contains five. Its own-label, QuarterPounder burgers are now a leaner, more diet-conscious three sixteenths and a pack of 20 Asda cigarettes may only contain 9, bringing back pack prices not seen since wartime.

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A new Lidl opened near here recently, So busy a couple of weekends after inital opening firned said it was one in one out at the front door (at the weekend).

Trouble for the big supermarkets is so not over.

Edited by onlyme2

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What do they expect......more supermarkets, more tills, more convenience stores will mean the money people budget to spend on food has to be split amongst more food retailers......people are trying to cut down on the number of calories they eat, we are already fat enough as a country.......also there are more takeaways for people that eat on the run, little spare time or don't have cooking facilities at home such as a standard cooker and hob....hopefully more are buying at greengrocers and markets, fresh seasonal and local foods which I am finding compete very well in price with the plastic wrapped supermarket climate controlled produce that has often travelled hundreds of miles. ;)

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I think they are going to find it is like airlines - but more so

unless you start from scratch to build a low cost business model, you won't get there

from what I have seen of an Asda or a Tesco store and warehouse, they just aren't designed to be low cost from the ground up - too many staff needed, too much expensive equipment (counter, fridges, display units, tills, self serve tills, tobacco, lottery).

it is like BA trying to compete on price with Ryanair

the difference - and why I say more so, is that price really is the driver for grocery these days... service isn't wanted / needed by many, many shoppers

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That surprises me as I often look at Asda prices and they are much cheaper than Tesco, Sainsbury, Morrison, etc. There are 3 Asdas in Swansea but none anywhere near me but when I do go there they are always full. Really surprised that they have such poor sales.

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We shop at ASDA, as their prices are generally very good if not better than Lidl. But like you say, their fixed costs will never be as low as the discounters.

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We shop at ASDA, as their prices are generally very good if not better than Lidl. But like you say, their fixed costs will never be as low as the discounters.

Maybe the odd line, like milk and butter is the same, but everything else is a hell of a lot more expensive in Asda.

I also was shocked walking into Tesco's since the election. Loads of lines 33% rise in price. Seems like the Toffs who run the big supermarkets think that a Tory victory will have made all it's customers suddenly feel wealthy again. Stupid cretins!

Edited by Bill D'arblay

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I think they are going to find it is like airlines - but more so

unless you start from scratch to build a low cost business model, you won't get there

That sounds about right to me.

The discounters have:

*Ugly stores

*Stuff all over the place in cardboard boxes

*Almost no known brands

*Almost no speciality foods, unless you count the iffy-looking German sausages

I don't shop there regularly, but when I do I always buy stuff in bulk which would cost a fortune anywhere else. Olive oil. Italian coffee, honey, Iffy-looking German sausages etc.

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That sounds about right to me.

The discounters have:

*Ugly stores

*Stuff all over the place in cardboard boxes

*Almost no known brands

*Almost no speciality foods, unless you count the iffy-looking German sausages

I don't shop there regularly, but when I do I always buy stuff in bulk which would cost a fortune anywhere else. Olive oil. Italian coffee, honey, Iffy-looking German sausages etc.

You buy olive oil and honey?

Well that's blown your Greek credentials out of the water.

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That sounds about right to me.

The discounters have:

*Ugly stores

*Stuff all over the place in cardboard boxes

*Almost no known brands

*Almost no speciality foods, unless you count the iffy-looking German sausages

I don't shop there regularly, but when I do I always buy stuff in bulk which would cost a fortune anywhere else. Olive oil. Italian coffee, honey, Iffy-looking German sausages etc.

Ugly stores? Check out the new Morrisons in MK. Kim il Jong would be proud.

9313482-large.jpg

Stuff all over the place in cardboard boxes

So?

Almost no known brands

Maybe not to you - but well known to people who don't like being ripped off.

Almost no speciality foods, unless you count the iffy-looking German sausages

Well, I prefer continental sausages to 'Richmonds' or the forced water muck in the big 4 supermarkets. For specialty foods I go to specialty shops like the local Pakistani's. The local Tesco's ran a campaign using an entire isle dumping Asian food to put them all out of business - luckily they couldn't and gave up.

Still. There's no accounting for peoples taste or willingness to throw away their money.

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*Almost no speciality foods, unless you count the iffy-looking German sausages

Look at the meat content in their meats - often it is much higher than the stuff in many UK supermarkets.

There was an interesting prog on the BBC last year - radio - with a wholesale importer of meats across Europe. He, a Brit, talked about how he would often only sell meat to the UK after it had been rejected by most other EU countries. He gave an example of a consignment of meat that went around Portugal, Spain, Greece, Italy and Germany - all rejected it - before it was, allegedly, sold to a UK store.

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Look at the meat content in their meats - often it is much higher than the stuff in many UK supermarkets.

Agree!

However when the 'My Lidl Pony' jokes started flying I stopped eating my pasties until I saw a 'Panorama' on the Romanian horse abattoir/processor involved and was very impressed with it's operation and cleanliness. Much better than many in Blighty.

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Too many supermarkets, essentially on about a 4 or 5 mile stretch of road in Sheffield you can play Supermarket bingo and I think we have a full house. Waitrose, Tesco, Aldi, Iceland, Morrisons, Iceland, Asda, Sainsburys, Netto, Lidl, Asda.

And somehow they wonder why sales are declining.

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Walmart Sales, Comps Miss; Operating Income Tumbles; Runs Out Of Scapegoats

walmart%20logo%202.jpg

In what may be the most cryptic press release from Walmart yet, the company just issued an 8-K which consisted all of 5 bullet points, a few charts, and precious little else. Perhaps the reason for the pithy transmission is that WMT had nothing good to say: Revenue declined from $115 billion to $114.8 billion, missing expectations of a jump to $116.2 billion, EPS also missed at $1.03, vs $1.05 expected, operating income tumbled 8.3% from $6.2 billion to $5.7 billion, and finally comp store sales also missed at 1.0%, below the 1.5% expected. With these results, anyone would be short and to the point.

It appears the parent isn't doing much better....

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I suspect the big supermarkets suffer from pension issues, where as the discounters pay more per hour but have no pensions.

If this is the case then the big supermarkets can never win and will surely end up with larger margins and reduced market share.

Once upon a time (pre 2008) Tesco made good money by offering a wide variety of crap. The troube is that people can now only afford a reduced range of crap and that's where Lidl come it.

Some of the food I pickup in Lidl like olives are far superior to that you can buy in any other supermarket. Once you get used to shopping there you can time the purchase of your goods as the same offers come around every 3 or 6 months.

Want motorcycle gear, then wait until March and get in in Aldi. Want a pressue washer, wait until April and buy in Lidl etc. The own brand homewares have a far longer guarantee than the branded goods the other supermarkets, amazon, and argos sell.

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Walmart Sales, Comps Miss; Operating Income Tumbles; Runs Out Of Scapegoats

walmart%20logo%202.jpg

In what may be the most cryptic press release from Walmart yet, the company just issued an 8-K which consisted all of 5 bullet points, a few charts, and precious little else. Perhaps the reason for the pithy transmission is that WMT had nothing good to say: Revenue declined from $115 billion to $114.8 billion, missing expectations of a jump to $116.2 billion, EPS also missed at $1.03, vs $1.05 expected, operating income tumbled 8.3% from $6.2 billion to $5.7 billion, and finally comp store sales also missed at 1.0%, below the 1.5% expected. With these results, anyone would be short and to the point.

It appears the parent isn't doing much better....

It's seems to be like everything else in the economy - the supermarkets are yielding less and that is to be expected.

If interest rates returned to 5%, you can bet share yields would return to that level as everyone would jack up their margins. Just another example of how low interest rates are causing deflation.

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Maybe something to do with this story where ASDA figure quite prominently

http://www.dailymail.co.uk/news/article-3085713/Your-fury-self-service-tills-Mail-s-crusade-against-maddening-automatic-checkouts-REALLY-struck-nerve-readers-vent-frustration-store-bosses-note.html

I think I may have used the ASDA supermarket where the woman upended a full trolley of groceries when the staff tried to make her scan it through a self service till and then refused to give her quid back from the trolley when she said No Sale. It has a whole bank of manual tills and only six self service tills. When I went there two of the automated tills were out of order and none of the ordinary tills were manned. As a consequence there were massive queues at the remaining self service checkouts. Self service works OK for small baskets ( i.e. ten items or less) but making someone who is potentially buying £50 plus worth of groceries in a trolley use one is frankly taking the p*ss. Basically that crap level of service is not going to cut it in the current retail environment unless you are really very cheap.

Edited by stormymonday_2011

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That sounds about right to me.

The discounters have:

*Ugly stores

*Stuff all over the place in cardboard boxes

*Almost no known brands

*Almost no speciality foods, unless you count the iffy-looking German sausages

I don't shop there regularly, but when I do I always buy stuff in bulk which would cost a fortune anywhere else. Olive oil. Italian coffee, honey, Iffy-looking German sausages etc.

Absolute cobblers.

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Look at the meat content in their meats - often it is much higher than the stuff in many UK supermarkets.

There was an interesting prog on the BBC last year - radio - with a wholesale importer of meats across Europe. He, a Brit, talked about how he would often only sell meat to the UK after it had been rejected by most other EU countries. He gave an example of a consignment of meat that went around Portugal, Spain, Greece, Italy and Germany - all rejected it - before it was, allegedly, sold to a UK store.

Interesting. I do buy the German sausages in Lidl and Aldi. As far as I know, German sausages are well protected by legislation. You can't tip in a bucket of tripe and sawdust and call them pork as ye olde English butchers used to.

Last year I spent nearly six months in UK. Have to say that I have rarely come across bacon with such a high water content.

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