Tesco’s surprise like-for-like sales rise over Christmas generates plenty of headlines this morning as the papers decided what it means for the beleaguered supermarket sector.
The Daily Mail’s Alex Brummer said CEO Dave Lewis had confounded the critics by enjoying a surprisingly merry Christmas. “Here is a puzzle. After all the attention on Lidl and Aldi, with the hyped Kantar market research suggesting bigger market shares, it’s the home-grown grocers Tesco, Wm Morrison and J Sainsbury which all delivered surprisingly strong festive trading.” He adds that it demonstrates the power of competition. The big four’s margins may be getting squeezed but shoppers are getting much better deals.
The Financial Times Lombard column writes that the seasonal numbers gave Lewis something to smile about. “Dave Lewis, chief executive of Tesco, was reborn over Christmas. Gone is “Drastic Dave”, bringer of impairments, destroyer of worlds. In his place is “Enthusiastic Dave”, a man humbled by the “passion, achievement and commitment” of his colleagues.”
Now the dust of the Christmas trading updates has settled, The Telegraph tries to identify the victor of the “jingle till battle”. However, the paper notes it is a difficult task when supermarkets produce different figures focusing on different periods. Nonetheless James Quinn gives it a go by rounding up the stock market updates and Kantar data. He almost gives the winner’s medal to Tesco for its like-for-like rise of 1.3%, but the grocer misses out because it gave no explanation why its trading period this year was for the six weeks to 9 January and last year related to the six weeks to 3 January. “So who was the winner? The honest answer is: it’s difficult to say. The data available does not allow for accurate comparisons, and so picking a winner is impossible. One grocery chief executive I’ve spoken to in the past few days says that he tries to ignore the market data, and instead concentrate on what his retailer is doing financially. That focus is probably sensible. Obsessing over the potentially skewed public data of his rivals could drive one to insanity.”
Alastair Osborne of The Times writes a business commentary on the Sainsbury’s bid for Argos that is dripping in sarcasm. He said we now know why Sainsbury’s was so keen on buying Argos before going on to point to the yesterday’s trading update for Home Retail Group: like-for-like sales down 2.2% in the past 18 weeks, gross margins 2.25 percentage points lower and profits expected to come in at the bottom of the forecast range. “If yesterday was the chance for John Walden, the Home Retail boss, to prove why Sainsbury’s must pay top whack for the business, he did kind of blow it,” Osborne added.
The Telegraph Questor column moves the shares of Associated British Foods to a ‘sell’ after sales at Primark slowed sharply in Q1. The column said the FTSE 100 group had become “increasingly reliant” on the discount clothing group for profits.
The owner of Southern Comfort is selling the brand to rival liquor business Sazerac as part of a $543.5m deal, which also includes the smaller premium liqueur brand Tuaca (The Telegraph).
Finally, The Independent features a picture-led story detailing the McDonald’s of the future. McDonald’s Next has opened in Hong Kong offering quinoa, a salad bar, touch screens, an open kitchen and table service.
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