REVIEW AND COMMENT: JUNE In the news...


Morrisons and Waitrose in food fight over Ocado Supermarket Morrisons’ tie-up with


delivery firm Ocado will mean the supermarket has an online grocery store at long last. However, the move has angered rival supermarket Waitrose, which also has a deal with the delivery firm. The 25-year deal, which involves Morrisons paying up to £170 million to Ocado to acquire the site and equipment, is expected to launch at the end of the year. Morrisons chief executive Dalton Philips


said: "This agreement is a significant strategic step for Morrisons. From a standing start, Morrisons will be competing in the fast-growing online channel by the end of this year with a really compelling proposition.


The customer gets our


affordable fresh food delivered by Ocado's state-of-the-art distribution system." Waitrose is reported to be examining the tie-up after boss Mark Price said last week that he "would never knowingly sign a contract with Ocado that agreed to them working with another retail competitor” and added that his firm is at "defcon one" over the deal. However, Ocado chief executive Tim Steiner said the agreement would have no impact on its existing arrangements. He added: "We will continue to source products under our long-term agreement with Waitrose, and our customers will continue to benefit from the existing high levels of service, wide range of products and competitive prices that they currently enjoy." Mr Steiner said he does not expect


Waitrose to launch a legal challenge to the Morrisons deal “because there are no grounds” for them to do so. However, Waitrose is clearly keen to protect its own sourcing agreement with the delivery firm and if there is anything in the deal that might hurt the supermarket, we can expect further action from the John Lewis Partnership.


prepare for the worst In a fresh blow for Waterstones, every manager was told last month that they should prepare to be made redundant. Hundreds of jobs could go at the UK's last nationwide book chain after the retailer launched a consultation with 560 managers in a bid to cut costs.


The 284-store retailer, which employs 4,000 staff in stores and head office, reportedly blamed "unforgiving" trading conditions for the consultation but said the restructuring would help put more emphasis on "traditional shop-floor bookselling". Waterstones' managing director James Daunt indicated that those holding the positions of branch manager, manager,


assistant


general manager and deputy manager will enter into a consultation before the company restructures. Subsequent to this restructure, all of those roles are to be abolished and replaced with a new ‘bookshop manager’ role. This role, Mr Daunt added, will “call on different skills”.


Amazon corporation


tax bill revealed The UK arm of Amazon came under fire once again as it was revealed the firm paid corporation tax of just £2.4 million last year despite making sales of £4.2 billion. Details of the American firm's tax contribution were revealed in filings at Companies House and came just as fellow internet giant Google also appeared before MPs to be quizzed about its tax bill. The revelation also follows uproar over the tax paid by other multinational giants including Starbucks and Apple. Amazon received UK Government grants of £2.5 million last year, beating its corporation tax payments and the company reduced tax payments by routing its sales through Luxembourg where its European headquarters are situated.


Waterstones managers M&S


M&S places hopes in


“turnaround” fashion range Marks & Spencer's annual profits fell to their


lowest level in four years last month, as food sales were offset by a slump in clothing sales. Underlying pre-tax profits for the year were £665.2 million, a fall of 6% on a year earlier and well below City forecasts for £710 million at the beginning of the financial year, since when expectations had already been revised. It is a far- cry from the retailer's heyday in 2008 when it made profits of more than £1 billion. The results mean chief executive Marc Bolland


remains under pressure to turn around the high street stalwart, particularly in the wake of an executive reshuffle and the launch of a new "turnaround" clothing range earlier in the month. Mr Bolland called the fashion collection a “step in the right direction” following a series of setbacks that have taken their toll on the retailer. Mr Bolland carried out a major reshuffle last


year amid sliding sales, but the executive makeover received a major setback when "Knicker Queen" Janie Schaffer walked out after just three months as director of lingerie and beauty. More bad news came when Steven Sharp, executive director of marketing, largely credited for the recovery of the M&S brand and who was responsible for the Your M&S slogan, retired after nine years. He will be replaced by Patrick Bousquet-Chavanne, formerly of Estee Lauder but will still be a huge loss to the business.


The company said the new fashion team, led


by John Dixon, the head of general merchandise brought over from M&S Food, and style director Belinda Earl, the former Debenhams and Jaeger boss, was "reinvigorating" its ranges.


Read more online at www.theappointment.co.uk 04 JUNE 2013


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