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Sainsbury’s vows to match Aldi in price war

Sainsbury's vows to match Aldi in price war
Photo by Sainbury´s – Aldi price match

UK retailer Sainsbury’s has thrown down the gauntlet by announcing  it will match discounter Aldi on hundreds of popular items. The around 250 items will include both own-label and branded products and focus on a range of lines from fruit and vegetables to meat, chicken and dairy. The initiative includes savings such as a five pack of Fairtrade bananas, lowered from 80p to 69p; a six-pack of kiwi fruit down 18p at 67p; celery 7p off at 43p; 220g of Imperfectly Tasty Green Beans down 6p at 69p; 1kg of Imperfectly Tasty Carrots 5p off at 40p; 1kg of Imperfectly Tasty Baby Potatoes down 30p at 65p; and 1kg Greengrocer Berry Mix 11p lower at £2.39.

Chief executive Simon Roberts said: “We are making great progress delivering our Food First plan and I’m determined that in these tough times, we do even more to help our customers save money. Our new commitment to match Aldi prices on hundreds of our most popular products will mean our customers can be confident that they are getting the quality they expect from Sainsbury’s at great prices.”

Sainsbury’s also has a Price Lock campaign, with the price of around 2,500 everyday products fixed for at least eight weeks.

 

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Lidl reports losses following heavy investments

Lidl reports losses following heavy investments
Photo: LIDL GB

Lidl UK has suffered heavy losses after investing in new stores. A pre-tax loss of £25.2 million was reported for the year up to February 29th 2020. This comes after registering profits of £19 million in the previous year. The losses come after the German-owned discounter invested £654 million in opening 51 stores as well as a new warehouse in Scotland, while expanding its UK workforce by 8% to 23,249 employees. 

Lidl has continued to take on new employees to meet the surging demand during the current pandemic. It posted a record 17.9% increase in total year-on-year sales during the four weeks to December 27.

Lidl has opened over 50 new stores in the past year to approach its target of 1,000 outlets by 2023. The discounter has more than 800 stores and 13 distribution centres across the UK and plans to open a new £70 million headquarters in Tolworth, Surrey, by the end of 2021.

 

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Tesco commits to selling more healthy food

Tesco commits to selling more healthy food
Photo: tescoplc.com

UK retailer Tesco has announced plans to make more healthy and sustainable food available at its stores. With its direct competitors, Sainsbury’s and Marks & Spencer, having made similar commitments in recent times, the pressure is on Tesco to do likewise to address the UK’s obesity crisis. The move is being proposed by a shareholders’ group within Tesco and will be proposed at the next shareholders’ meeting. If passed, Tesco will have to disclose more about its share of sales of healthier foods and publish annual updates on how it improves.

Ignacio Vázquez, senior manager at ShareAction, stated that “As the UK’s largest food retailer, Tesco’s actions are of great importance in combating obesity. But its privileged position in the market has not yet translated into leadership in this area. We hope that the Tesco board supports the resolution and seizes the opportunity to help build a healthier post-Covid UK, while improving its long-term financial sustainability.”

Sponsors of the measure include Robeco Institutional Asset Management, JO Hambro Capital Management’s UK Dynamic Fund, and Epworth Investment Management, owned by the Central Finance Board of the Methodist Church. Together, they manage £ 140 billion in funds.

A Tesco spokesperson spoke to the BBC and explained that “we are working hard to make it easier for our customers to make healthy choices, and we have set very clear goals on health and sustainability, published in our Small Grants Plan. We have already eliminated more than 50,000 million calories from their products since 2018.” And that they have carried out a series of promotional activities in their supermarkets offering healthy alternatives and giving more than 100 million fruit to children. “We also have the goal of increasing sales of plant-based meat alternatives by 300% by 2025.”

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Metro remains defiant despite sales slump

Metro remains defiant despite sales slump
Photo: Metro Group

Wholesale group Metro has said that its performance in key markets such as Germany, France and Italy was better than expected in the first quarter of the financial year, despite the group posting a 11.2% sales decline in the period, reports ESM Magazine. Group sales came in at €6.3 billion for the quarter, which was down from the €7.5 billon Metro reported in the first quarter of last year, while adjusted EBITDA was down 23%.

The group said that it ‘performed better’ compared to the comparable ‘lockdown quarter’ of Q3 last year, in which sales were down 17.4%. It noted that Russia has now posted ‘substantial positive development’ for four quarters in a row, posting sales growth in local currency of 6.3% in the first quarter, however Western Europe, particularly Germany, ‘has felt the impact of the government measures re- lated to the COVID-19 pandemic particularly strongly’.

In Germany sales in local currency and in like-for-like terms declined 4.5%, while in Western Europe (excluding Germany), sales dropped by 23.7%.

In addition, COVID-19 measures and exchange rate developments (particularly in Russia and Turkey) contributed to the group’s decline in adjusted EBITDA.

Christian Baier, co-chairman and CFO, said: “As expected, our Q1 was impacted by the second COVID-19 wave. Metro was well prepared for it, so the declines were less pronounced than in the 1st wave. Our core markets, such as Germany, France and Italy are still developing above market level and our growth in Russia is proving sustainable. This confirms our assumptions and we are preparing for a return to normality in our business, even though COVID-19 will still impact our business in the coming months.”

 

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Russian discounter to open in Spain 

Russian discounter to open in Spain 
Photo: merespain.com

Russian budget retailer Mere, owned by the Svetofor Group, is to open stores across Spain this year. The firm claims that it will offer goods that are up to 20% cheaper than its rival supermarkets, with the range including everything from food and household goods to clothes and the latest gadgets.

Managing director of Mere in Spain, Andrey Murzov, said that the stores will be “spartan” and “no frills,”, but the savings on decor will allow really low prices.

“Everything is stocked on pallets or in boxes, in order to reduce overheads as much as possible and be able to offer very cheap products,” said Murzov. “This model of store is similar to what Lidl and Aldi used to do years ago. Our aim is to offer the best prices every day, thanks to a business concept that involves saving costs – rent, decoration and personnel.”

The retail giant has big plans, with more than 100 stores expected to be dotted around the country by 2025. This year, the first branch will open in May, expanding to 10 or 15 by the end of 2021. Although the exact locations of the supermarkets haven’t yet been finalised, they are expected to be launched in Andalucía, Valencia, Madrid, Murcia and Catalonia.

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Edeka to purchase 44 Real stores

Edeka to purchase 44 Real stores

 

The break-up of retailer Real continues, with Edeka set to complete the takeover of 44 Real stores, according to Lebensmittel Zeitung. Edeka is also in negotiations to acquire a further 28 stores in the future. In the meantime, Germany’s Federal Cartel Office, the Bundeskartellamt, has ruled that allowing Edeka to acquire the 28 stores would create significant competition concerns.

Since announcing the sale of its Real banner to the SCP Group in June 2020, Kaufland has acquired 92 stores, while Globus has gained a further 24, with negotiations on-going for the rest. In an attempt to maintain competition, especially at a local level, the Bundeskartellamt is requiring SCP to sell some of the Real stores to medium-sized retailers.

 

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Sonae MC leads the way in sustainability

Sonae MC leads the way in sustainability according to Ellen MacArthur Foundation report © Ellen MacArthur Foundation

© Ellen MacArthur Foundation

 

Sonae MC has been named Portugal’s top retailer for its use of reusable, recyclable or compostable packaging, according to the Ellen MacArthur Foundation Annual Report, which reports on the progress across the 400 or so signatories of the New Plastics Economy global commitment. The Portuguese retailer was also one of the best-performing global retailers among the signatories, ranking fourth in terms of the percentage of reusable plastic incorporated in its packaging (13.4%), surpassing companies like Starbucks and Delhaize.

Sonae MC ranks seventh in terms of the percentage (55%) of effectively reused, recyclable or compostable packaging, ahead of groups such as Carrefour, Marks & Spencer and Walmart.

Set up in 2018, the Ellen MacArthur Foundation’s New Plastics Economy initiative is supported by the UN Environment Programme and aims to bring forward to 2025 the European goals set for 2030.The main ambitions are to eliminate unnecessary plastic objects, redesign packaging, focus on innovation so that all plastic is reusable, recyclable or compostable, and ensure that all plastic is used in a circular way and dissociated from the consumption of finite resources. For Sonae MC, the challenge is to guarantee a circular economy in which not only the life time of the material is prolonged, but also avoiding its disposal in nature or incineration as undifferentiated waste.

Sonae MC has set a 2025 deadline for all of its own Continente branded plastic packaging to be reusable or recyclable in a cost-effective way. Continente has been implementing several measures within its Strategy for the Responsible Use of Plastics, both in terms of its dealings with logistics firms and suppliers, as well as at an internal level and by raising consumer awareness. In 2020, Continente saved over 4,200 tons of virgin plastic, representing a 90% growth compared to the 2,200 tons/year announced in April 2019.

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Morrisons raises minimum wage to £10 an hour in UK 

Morrisons offers discount for food suppliers © dailystar.co.uk
Photo: Moririson London by dailystar.co.uk

Retailer Morrisons has announced it is to become the first supermarket in the UK to pay at least £10 an hour to all of its 120,000 staff, as from April 2021. The new payment policy will result in a significant pay increase of around 9% for 96,000 employees. Currently, Morrisons has a minimum hourly wage rate of £9.20. The increase will be primarily funded by investment in payroll, as well as changes to bonus pay-outs. Staff told the supermarket they would prefer to have a guaranteed amount in their hourly rate and receive it more regularly than the current bonus scheme.

Morrisons chief executive David Potts said: “It’s great to be able to say that in the UK from April this year, if you work at Morrisons supermarkets, you will earn at least £10 an hour. It’s a symbolic and important milestone that represents another step in rewarding the incredibly important work that our colleagues do up and down the country.”

Morrisons said there would also be a London weighting, with rates for inner London rising by 85p and outer London by 60p per hour.

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Tesco records surge in post-Christmas sales

Tesco records surge in post-Christmas sales
Photo: Tesco logo

UK retailer Tesco has seen a large bump in sales since Christmas, but costs associated with the pandemic continue to soar, as restrictions are strengthened. The cost of dealing with the pandemic are projected to total £810 million this year, which is 10% higher than its earlier prediction, due to the spiralling cases across the country.

For the 19 weeks to January 9, Tesco’s UK sales increased by 7.6% y-o-y to £14.7 billion. For the final six weeks of the period, which included the peak Christmas trading season, there was 8.4% y-o-y growth. In all of its markets, Tesco reported 7% sales growth to just under £20 billion during the 19-week period, with online sales up by over 80% in that period, as more than seven million Christmas orders were delivered.

Chief executive Ken Murphy said: “Our focus on looking after our customers, including delivering record availability, robust safety measures and great value, has enabled us to maintain strong momentum through the Christmas period, outperforming the market every week. We delivered a record Christmas across all of our formats and channels. We’re in great shape to keep delivering in 2021 and beyond.”

 

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French government opposes take-over of Carrefour

French government opposes take-over of Carrefour
Photo: Réussir Fruits et Légumes

France’s government has opposed the proposed €16.2 billion takeover of French supermarket chain Carrefour by Canadian convenience store group Couche-Tard, according to Reuters. Labour Minister Elisabeth Borne said Thursday on Radio Europe 1 that she is “opposed to a takeover.” That follows similar comments by Finance Minister Bruno Le Maire who explained that the country’s “food sovereignty” is at stake. “I’m not in favour of such a deal,” Le Maire said on television channel France 5.

Carrefour is Europe’s biggest retailer and the biggest private employer in France, with over 105,000 employees in the country. Under French rules on controlling foreign investment, the government’s approval is required in some strategic sectors, which includes food retail, Le Maire said.

Carrefour said in a statement that the Alimentation Couche-Tard group had approached it with a tie-up proposal and that talks are at an early stage. Couche-Tard also confirmed it proposed an initial “friendly combination” at the price of €20 per share but stressed “there is no certainty at this stage that these discussions will result in any agreement or transaction.”