NEWS ShopTalk T
he Competition Market Authority has started an investigation into the anticipated acquisition by the Co-operative Group of mutual organisation Nisa Retail.
Launched on 22 February, the first phase of the inquiry took the form of an invitation to comment, and was open until 09 March 2018.
C
ostcutter is geared up for its new supply deal with the Co-op, coming into force this month. Retail members have been briefed on the changes that will come as part of the new supply agreement, including the potential for Costcutter retailers to become Co-op franchisees.
Changes in the pipeline include the phasing out of Costcutter’s own-label range, to be substituted for the Co- op’s 2,000 SKU own-label range. The symbol also expects that the supply deal will provide retailers with a major opportunity to grow their fresh and food-to-go offer.
The regulator is examining whether the transaction, if carried into effect, would result in the creation of a relevant merger situation which could potentially cause ‘substantial lessening’ of competition within the markets. The CMA will make a decision by 23 April.
Nisa members approved the Co-op Group’s offer to buy the business for £137.5m in November last year, but the offer requires CMA approval. The Group became the exclusive bidder for Nisa after Sainsbury’s dropped out, arguably due to concerns that CMA could block the acquisition.
A spokesman for the Group said: “We’re in a process where CMA is reviewing the deal and we’re waiting to hear the outcome, so we’re limited in what we can say at present. We remain grateful for the patience of all the retailers who are also waiting to hear if the deal is approved.”
6 April 2018
Costcutter chief executive Darcy Willson-Rymer also informed journalists in a briefing that the new deal will put to bed any supply issues. Prior to its collapse, Palmer & Harvey was a main supplier for Costcutter stores.
M continues.
The chain made underlying pre-tax profits of £374m in the year to 04 February, £37m higher than in 2016. Like-for-like sales, which strip out stores open for less than a year, were 2.8% higher excluding fuel. The retailer said performance was strong despite the challenges of higher import costs.
Revenues rose £1bn to £17.3bn and chairman Andrew Higginson said Morrisons was now entering its third consecutive year of growth. ETX Capital analyst Neil Wilson said there was a “sense that this
orrisons has seen annual profits jump 11% as its turnaround programme
kind of growth will be difficult to maintain, but this has been the argument for some time and has continually been wrong”.
set to grow to 15% by 2020, up from 12.1%.
Aldi and Lidl are also modernising existing stores and making a push into premium ranges that chimes with British shoppers, who, squeezed by inflation and subdued wage growth, have become more cautious in their spending.
Morrisons announced a special dividend of 4p per share, which it said reflected its good progress and expectations for continued growth. Laith Khalaf, a Hargreaves Lansdown analyst, said the supermarket’s largely UK supply chain had helped to “keep prices competitive, in a market where the falling pound has increased the cost of imported food”.
G
erman-owned discount supermarkets Aldi and Lidl are ploughing ahead with a rapid expansion in Britain and are on course to grab more market share from the traditional big four players.
Aldi aims to have 1,000 UK stores by 2022, up from its current 762 while Lidl sees the possibility of 1,200 to 1,500 stores in the long-term, up from 710.
Meanwhile, store openings at Tesco, Sainsbury’s, Asda and Morrisons have slowed to a trickle. They are shedding thousands of jobs in order to save money and better compete with the discounters. Aldi and Lidl’s combined share of the £200bn UK grocery market is
S
par International is continuing its worldwide expansion with an entry into the Greek market of independent food supermarkets. Spar Hellas hopes to establish itself as the “most modern cooperative network of independent retail stores in the country”, said chief executive Fivos Karakitsos.
The first 10 Greek Spar stores are due to open by July; 80 stores will be operational by the end of 2018. Within four years, over 500 Spar stores are expected to adorn the Greek food retail landscape, 200 of which are currently part of the Asteras association. In a cooperation with the Mesis chain, most Asteras stores will be converted to Spar branches.
As the world’s largest food retail voluntary chain, Spar International owns over 12,500 stores worldwide and reported global retail sales of €33.1bn in 2016.
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