Jump to content
House Price Crash Forum
Sign in to follow this  
Fairyland

Dt: Tesco-Bury's And As Morrisons. Could Britain's Supermarkets Be About To Merge?

Recommended Posts

Will merger help them though???

Tesco-bury's and AS Morrisons. Could Britain's supermarkets be about to merge?

Corporate mega-mergers are often compared unfavourably to the proverbial couple of drunks who prop each other up at a bar. Dixons and Carphone Warehouse, Office Depot and Staples, and Microsoft and Nokia are just three recent examples.

The amusing aspect of this analogy is that no one has ever really explained what happens next. Do the drunks help each other to recover and enjoy the rest of the night? Do they endure the night at the bar together, blissfully unaware that everyone else has gone to a new party? Or do they fail to realise the state that each other is in because of their intoxication and fall asleep at the bar?

The two drunks are back on the agenda this week after Ahold, of the Netherlands, and Delhaize, of Belgium, announced they would merge.

The two supermarket chains will form a company worth €24.9bn (£17.7bn) with $54bn of sales, 6,500 stores and 375,000 staff.

The deal puts the enlarged group alongside Walmart, Carrefour and Tesco in the premier league of international retailers by size.

It inevitably prompted chatter in the City about the prospect of two of Britain’s “Big Four” supermarkets combining, with analysts at Societe Generale going to town on the idea of Sainsbury’s and Morrisons doing a deal.

This is where our two drunks – or should that be four? – make their entrance. Britain’s “Big Four” - with Tesco and Asda making up the numbers - are enduring a tumultuous period. They are suffering from a brutal combination of strategic blunders, improved competition and changes in shopping habits.

Share this post


Link to post
Share on other sites

not sure any two of the big four (Tesco, JS, Asda, Morrisons) have the appetite for it or that it would get past the CMC stage

But we saw Asda buy Netto in the UK

I think the most likely play in grocery retail (and I think this is unlikely) is for Carrefour to buy Ocado as its proper entry into the UK

Edited by pipllman

Share this post


Link to post
Share on other sites

I can't see any of them merging with larger rivals because that isn't the direction the sector is taking, quite simply. Everything is apparently getting smaller. What I want to know is why are Morrisons still only offering their delivery service to a handful of northern postcodes, didn't they launch online over a year ago?

My prediction is that Morrisons will continue to sink in market share and further into the red, and get bought out in 3-4 years time by an overseas supermarket chain.

Share this post


Link to post
Share on other sites

I can't see any of them merging with larger rivals because that isn't the direction the sector is taking, quite simply. Everything is apparently getting smaller.

... could try merging some of the products then, spunko ....

11010296_581772611965641_396158798391036

.... perhaps not.

Share this post


Link to post
Share on other sites

These supermarkets are losing trade because they have become less affordable to shoppers, and cheaper rivals have stepped in to supply that demand. Not sure a merger is going to help solve that problem - maybe if they can cut costs by merging? A merger in itself can be very costly. Whatever they decide to do, their main problem is that their customer base has become significantly poorer over the last 10 years.

Share this post


Link to post
Share on other sites

The City boys will pump stories of mergers now as they love mergers - lots of money to be made - and it will help pump the share prices so they can buy low and sell higher. Loadsa money.

Share this post


Link to post
Share on other sites

not sure any two of the big four (Tesco, JS, Asda, Morrisons) have the appetite for it or that it would get past the CMC stage

But we saw Asda buy Netto in the UK

I think the most likely play in grocery retail (and I think this is unlikely) is for Carrefour to buy Ocado as its proper entry into the UK

and ..

Safeway was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index until it was acquired byMorrisons in March 2004. Most of its 479 stores were rebranded asMorrisons, with others being sold off. The brand disappeared from the UK on 24 November 2005.

Share this post


Link to post
Share on other sites

Morrison's wont ever merge with Tesco. Never.

The North remembers.

Besides, unless they can deal with ALDI/Lidl its all over for the both of them.

Spot on. Where I work you have a Tesco around 8 minutes walk from an Aldi. You go in Tesco and there is normally just 1 person actually serving on the tills. Another person will be playing with their techie change machine, and occasionally helping anyone foolish enough to risk the self service machine. Meanwhile in Aldi you'll get 10 tills constantly serving customers, and even then big queues. I get the feeling Tesco has become too big to control. The top brass may know what needs to be done, but they have little idea of how to do it. Meanwhile their staff spend half their time playing with the change machine, or even looking to engage customers in surveys.

Share this post


Link to post
Share on other sites
The top brass may know what needs to be done, but they have little idea of how to do it.

If your customer base becomes poorer, your business model has to accommodate that. Aldi and poundshops have actually been around for 25 years plus. The discounters didn't do any genius moves, nor did Tesco do anything particularly bad. It's just that the economy has changed. People have cut their cloth. Aldi's gain, Tesco's loss.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   52 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.