|Bid||215.60 x 0|
|Ask||215.80 x 0|
|Day's Range||208.30 - 216.00|
|52 Week Range||177.05 - 327.20|
|Beta (3Y Monthly)||1.42|
|PE Ratio (TTM)||24.25|
|Earnings Date||Nov 7, 2019|
|Forward Dividend & Yield||0.11 (5.13%)|
|1y Target Est||317.00|
The “John Lewis economy”, hailed by former deputy prime minister Nick Clegg as a model of employee ownership, is taking a beating. The pressures have forced chairman, Charlie Mayfield, to launch a radical shake-up that will combine the running of its two divisions, months before he is due to step down after 12 years.
(Bloomberg Opinion) -- In the five years since Tesco Plc was plunged into the biggest crisis in its history, Dave Lewis, its chief executive officer, has executed an (almost) textbook turnaround of Britain’s biggest retailer.He’s now decided that his job is done and he will hand over the reins next year to Ken Murphy of Walgreens Boots Alliance Inc.“Drastic Dave” — a moniker Lewis picked up because of his cost-cutting zeal in a former job at Unilever Plc — took Tesco out of intensive care. He revived sales growth, restored profit, cut debt and reinstated the dividend. The shares are 18% higher than they were back in 2014, when Tesco announced a bombshell 250 million-pound ($307 million) profit black hole. That stock price increase is twice that of the FTSE 100 index.There’s still a vague sense of disappointment, though. One might have expected some Lewis initiatives, such as taking prices closer to those of the German-owned discount grocers Aldi and Lidl, to bear more fruit. While Tesco is managing to grind out incremental growth in an ever-more-competitive market, it’s hard to get too excited by that.Lewis did deliver on his key turnaround target: lifting the company’s operating margin to between 3.5% and 4% six months earlier than expected. So he’s making the wise move for a CEO of going out on a high note.But it’s curious that he didn’t appear to be in the running for two other high-profile CEO posts that have been filled recently, at the consumer goods giants Unilever Plc and Reckitt Benckiser Group Plc. Lewis doesn’t have another job to go to and plans to take some time off before thinking about his next move.The choice of replacement is certainly a surprise. Lewis’s natural successor was Charles Wilson, the popular ex-boss of Booker, which Tesco bought in 2018. However, he stepped back from running Tesco’s British arm last year due to illness. Murphy was joint chief operating officer at Walgreens’ British pharmacy chain Boots before being promoted at the American parent. So he does have experience in the fiercely competitive U.K. retail market.Still, he has no direct experience of the cutthroat grocery sector, which has been transformed by the price-slashing antics of Aldi and Lidl. This is Tesco’s greatest challenge. At least Murphy will benefit from the advice of Wilson, who still has a senior role at Tesco.While the supermarket giant has prospered from the weakness of its great rival J Sainsbury Plc, the latter appears to have gotten its act together lately. And while the British shopper has remained pretty immune to Brexit so far, a no-deal departure from the European Union might change that.It won’t be easy to balance these challenges against an investor base that’s expecting a special dividend or buybacks from next year. Already Tesco’s U.K. sales growth has slowed. That may reflect a broader deceleration across the grocery market, after a strong 2018, but a slowdown is a slowdown. Shareholders are naturally cautious about the management change, although the stock did rise 2% in a falling London market on Wednesday.At least Lewis didn’t hang around beyond his sell-by date, unlike so many other CEOs.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- In the glossary of business jargon there’s a term beloved by financial analysts but that journalists find especially grating: the “equity story.”It’s the sort of non-speak that can be explained far more simply: Why should you invest in a given company? That’s something that WPP Plc Chief Executive Officer Mark Read, an operations guy, has yet to answer adequately when it comes to the firm he took over a year ago from Martin Sorrell, something of a finance wonk.The task should sit at the top of priorities for John Rogers, the retail executive appointed as WPP’s new finance chief on Tuesday. That’s not to say that Read hasn’t been busy since taking the helm of the world’s largest advertising holding company. He’s clinched deals to sell assets worth 3.6 billion pounds ($4.4 billion), merged divisions to cut costs and improve efficiency, and stanched some of the revenue declines in North America. The share price has recovered to outperform archrival Publicis Groupe SA since Read announced 2021 growth targets in December.But the London-based company’s shares are still trailing its other major peers — Omnicom Group, Interpublic Group and Dentsu Inc. — when compared to expectations for earnings a year out. Investors are hungry to understand just how WPP’s new guard will translate all of that action into solid, durable growth.Read’s predecessor Sorrell had a seemingly straightforward formula to deliver just that. He promised investors annual earnings per share growth of between 5% and 10%, a pledge he tended to keep until recent years. He did so with a personal recipe of strict targets for organic revenue growth, profitability improvements, stock buybacks and acquisitions and a little sugar on top, a 50% dividend payout ratio. The approach kept shareholders happy and the stock steadily ticking upwards for years.Echoing that formula isn’t realistic in the current era. A shift toward digital marketing on platforms such as Google and Facebook and the incursion of consultancies into the advertising market means dependable revenue growth is far harder to realize. And knuckling down on costs can make it yet harder still. In an attempt to keep the focus clear, Read changed WPP’s bonus policy to place greater emphasis on sales growth than profitability improvements.Rogers, who will join from U.K. grocer J Sainsbury Plc where he had been CFO for 6 years, has a difficult act to follow at WPP. Paul Richardson had a lower public profile than Sorrell, but he led WPP’s finance operations for 23 years. The firm generated an average return of 10% a year in that period.Rogers’s more recent background running Sainsbury’s Argos general-merchandise retail division, which it acquired in 2016, should serve him well, according to media consultant Alex DeGroote. It’s given him valuable experience integrating businesses and managing a vast property portfolio. But a lack of experience in the advertising industry and in North America mean he’s unlikely to be tasked with fixing WPP’s operations in the U.S. and Canada, where revenue declines have dragged down the rest of WPP.His main role will therefore be to help Read crystallize a realistic vision for the company that can reinvigorate investors. Optimism is currently muted: analysts’ average 12-month target price is just 8% above the level at which WPP is currently trading. If Read is making the necessary operational improvements, Rogers needs to help turn that into a better story.To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: Melissa Pozsgay at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Advertising group WPP has poached John Rogers, the boss of Sainsbury's Argos business and previously seen as a frontrunner to be the British supermarket group's next CEO, as its new finance chief. Rogers had been seen by analysts as the favourite internal candidate to succeed Mike Coupe as chief executive of Sainsbury's in due course.
Stocks in Europe traded lower on Wednesday amid the political cloud surrounding President Trump ahead of key trade talks between the U.S. and China.
Asda, the British supermarket arm of U.S. retail giant Walmart that is considering a future UK stock market listing, saw its profit increase 9.2% in 2018 - a year when it was unsuccessfully targeted for takeover by rival Sainsbury's. Sainsbury's 7.3 billion agreed bid for Asda was blocked by Britain's competition regulator in April, a full year after it was launched. Walmart said in May it would instead look at an initial public offering for Asda.
German discount supermarket group Aldi plans to pump 1 billion pounds ($1.25 billion) into Britain, chasing market share at the expense of profit, which dropped by 26% last year as it pursued sales growth, store openings and new customers. Britain's fifth biggest supermarket, which is privately owned by Germany's Aldi Sud, signalled no let-up for its larger rivals as it reaffirmed a commitment to investing in the UK, despite a low price pledge denting its 2018 profit. Aldi UK, which trades from about 840 stores and has a grocery market share of 8.1%, said sales increased 11% in 2018 and it gained 800,000 new customers.
(Bloomberg) -- Sainsbury is talking with advisers about a sale of its mortgage book, the Telegraph reports, as the supermarket chain looks for ways to shore up finances after its bid to buy Walmart Inc.’s Asda was blocked.The supermarket chain’s mortgage business, which amounted to about 1.4 billion pounds ($1.8 billion) at the end of February, could fetch 1.3 billion pounds if it finds a buyer, the newspaper said. The company is preparing a new strategy to present to investors and analysts on Sept. 25, the Telegraph reported. Sainsbury couldn’t be reached for comment outside of normal working hours. A sale would mark a shift from Sainsbury’s strategy, stated as recently as a June company report, to “continue to grow its mortgage business, increase revenues and drive customer loyalty over the coming year.” The company is under pressure to boost shareholder returns after the U.K. competition watchdog opposed the merger with Asda in February, leading to the deal’s collapse. Sainsbury shares have lost 16% of their value this year, compared with an almost 10 percent advance in the benchmark FTSE 100 index.Sainsbury is trying to mirror its peer Tesco Plc, which managed to offload its mortgage book earlier this month to Lloyds Banking Group Plc. The prospect of a no-deal Brexit didn’t stop the British bank paying about 3.8 billion pounds for the business.Sainsbury may struggle to sell its loss-making business because of high costs, the Telegraph said, citing an unidentified person. The unit made a 34 million-pound loss last year.Royal Bank of Scotland Group Plc and Banco Santander SA were among the initial bidders for Tesco Bank’s book of mortgages, according to separate press reports.\--With assistance from Sebastian Tong.To contact the reporter on this story: Michael Msika in London at email@example.comTo contact the editors responsible for this story: Sarah Kopit at firstname.lastname@example.org, Stephen Treloar, Andrew DavisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Britain's second-biggest supermarket, Sainsbury's , vowed on Friday to halve plastic packaging by 2025, promising to switch to alternative materials and refillable options to meet consumer demand for less waste. Having reduced plastic packaging by just 1% in 2018, Sainsbury's said a "transformational leap in thinking" was required to tackle the almost 120,000 tonnes of plastic packaging it uses a year. It said it used the most plastic in milk bottles, packaging for fruit and vegetables, and drinks.
(Bloomberg Opinion) -- Marks & Spencer Group Plc showed off its key looks for the autumn winter season this week. It is aiming to woo shoppers with 1970s-inspired prints, jewel toned blouses and tailored coats. But the high street stalwart has gone out of fashion with investors. Its shares are set to fall out of the FTSE 100 index for the first time in 35 years.As a bellwether for the British retail industry, M&S’s demotion underlines the dire condition of the U.K.’s store groups. But for the seller of Percy Pig sweets to cashmere sweaters, it isn't the disaster it might first appear to be.Its shares have fallen 33% over the past year, and at about 190 pence are close to their level at the depths of the financial crisis.Any further decline in the M&S share price precipitated by the relegation would be unwelcome to its army of individual investors, which own about 20% of the stock.But a fall out of the FTSE 100 would get the demotion over with. Talk of M&S’s demise wouldn’t keep coming round every quarter that M&S was on the cusp. That would at least give Chairman Archie Norman and his team a break from one pressure.And they have plenty of others to contend with. The clothing market remains extremely difficult. Analysts at Goldman Sachs expect a 3% decline in same-store U.K. clothing and home furnishing sales in M&S’s fiscal first half. Like-for-like food sales, they forecast, will be flat.Meanwhile, M&S must make a go of its joint venture with Ocado Plc, after buying half of the online retailer’s U.K. division for up to 750 million pounds ($916 million). Norman wants to double M&S’s food sales over the next five years or so to about 12 billion pounds – but he has to convince customers to switch from Ocado products currently supplied by Waitrose to alternatives from M&S.If the share price is hit further by the demotion from the FTSE 100, then it could finally force the company to consider splitting up its food and clothing operations. With profits from both divisions under pressure, and undemanding retail multiples, there’s little value to be gained from a break-up right now. But if Norman can make a go of the Ocado deal, this should elevate the worth of the food business, making a split more compelling.The other possibility is that a predator emerges. Bids for Greene King Plc in the U.K. and Metro AG in Germany show that appetite is there for consumer groups. While M&S’s old adversary Philip Green isn’t in a position to pounce, private equity might, particularly if it backed Norman and Justin King – handily, the former Sainsbury boss is a non-executive at the retailer. The group might just also appeal to Amazon.com Inc. But any bidder would have to get comfortable with the risks of both Brexit and M&S’s 9.3 billion pounds of pension liabilities. While the program had a 900 million-pound surplus at March 30, any change of control could see the trustees push a new new owner to inject more funds – possibly as much as 1 billion pounds.That leaves Norman with grinding out the promised turnaround. He will be hoping M&S’s spell in the FTSE 250 index will be a fleeting trend, rather than a wardrobe staple.\--With assistance from Elaine He.To contact the author of this story: Andrea Felsted at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
J Sainsbury on Tuesday continued its recovery from a 30-year low after data showed the supermarket chain was the best performer of the top four for the first time in nearly two years.
The company's response comes after the Telegraph newspaper reported earlier that the British supermarket chain was preparing internally for a succession plan. "Every responsible business has potential succession plans for its CEO. This is nothing new," a Sainsbury's spokesperson said in an emailed statement.
(Bloomberg) -- Spanish food delivery startup Glovo has drawn preliminary interest from Uber Technologies Inc. and Deliveroo in recent months as the industry undergoes a wave of consolidation, people familiar with the matter said.Talks between the Barcelona-based company and potential partners have been on and off and may not lead to a transaction, the people said, asking not to be identified because the deliberations are private. While suitors have shown preliminary interest, Glovo isn’t actively looking for a buyer, the people said.Glovo is continuing to raise fresh funding and has also held early-stage talks with SoftBank Group Corp. about a potential investment, two of the people said. Glovo, which has markets in Europe, Latin America and Africa, may prefer to explore partnerships or deals on a region-by-region basis rather than a full sale, one of the people said.Representatives for Glovo, Uber, Deliveroo and SoftBank declined to comment.Delivery platforms have become prime takeover targets as startups battle for survival against more established incumbents and companies branch out into new services. On Monday, Just Eat Plc and Takeaway.com NV agreed to a 5 billion-pound ($6.1 billion) combination, less than six months after Takeaway.com spent about $1 billion on rival Delivery Hero SE’s German operations. Last month, Glovo struck a deal with French grocer Carrefour SA to make deliveries in France, Spain, Italy and Argentina.Square Inc. is selling its Caviar food-delivery app to DoorDash Inc. for $410 million, while Amazon.com Inc. has agreed to invest in Deliveroo.Click here to read more about the surge in delivery deals.Glovo, which markets itself as an app for anything and lets users request a range of products, was valued at about 850 million euros ($950 million) in its last fundraising round, one of the people said. The company is considering an initial public offering as soon as 2020, people familiar with the plans said in April. Investors in the firm include restaurant-owner AmRest Holdings SE, venture capital firms Lakestar and Seaya Ventures and Delivery Hero.Uber Eats, targeting an expansion into grocery delivery, has held talks with the U.K.’s second-biggest grocer, J Sainsbury Plc, people familiar with the matter said last month. The supermarket operator this month announced it was partnering with Deliveroo to bring hot pizza to homes in four British cities.To contact the reporters on this story: Giles Turner in London at email@example.com;Rodrigo Orihuela in Madrid at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Amy Thomson, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Britain's competition regulator has stepped in to pause Amazon's deal with online food delivery group Deliveroo while it considers launching a full investigation. Amazon led a $575 million fundraising in Deliveroo in May, making what the two parties called "a minority investment" and going up against Uber Eats in the global race to dominate the market for takeaway meal deliveries.
Private shareholders in Sainsbury's berated the board of the British supermarket chain at its annual meeting on Thursday over its failed takeover of rival Asda, as well as a share price slump and what it pays its boss. Sainsbury's had its proposed 7.3 billion pound ($9.2 billion) takeover of Walmart owned Asda blocked by the UK competition regulator in April, which said the deal was likely to increase prices for shoppers. The group spent 46 million pounds on the Asda deal and Mike Coupe, chief executive since 2014, saw his total annual pay package rise 7% to 3.88 million pounds in the 2018-19 year despite the failure of the transaction.