The boss of Argos described a takeover bid from Sainsbury’s as “opportunistic” this weekend, and said his attempt to turn around the high street catalogue retailer was “not finished by a long shot”.
John Walden, chief executive of Home Retail Group, told The Sunday Times that “we didn’t pursue this strategy thinking we needed partners”. He said: “We do believe, as we build the transformation of Argos, we are building for a business that anticipates a digital future, and that’s unfolding as we expected.” (The Sunday Times £)
Argos’s future has become more unclear after Home Retail Group’s boss shunned interest from Sainsbury’s, according to The Daily Mail. However, Walden’s comments came as Lord Sainsbury, a former chairman of the chain who still controls around 3% of the shares, announced his support for buying Home Retail Group.
The Financial Times (£) has another stab at explaining the rationale for the deal, writing: “The best guess is that Sainsbury’s sees the deal as the answer to two interrelated problems. The first is how to extract more value from its stores when customers are drifting away in ever increasing numbers. The other is how to pursue an online strategy that contributes to the value of the business rather than acting as a drain.”
The Guardian this morning notes that the confirmation of the sale of Homebase to Australian brand Bunnings means the Homebase brand will disappear from the UK market. “Bunnings will be hoping to bring its winning combination of low prices, huge range and excellent customer service to the UK market.” (The Guardian)
Elsewhere, Waitrose is considering speeding up payments to its smallest suppliers after it emerged that it was taking three times longer than Tesco to pay some of its bills. The mutually owned upmarket grocer, which prides itself on its championing of British producers, has begun a high-level internal assessment of how it treats and pays its suppliers. (The Times £)
Late on Friday, The Daily Mail wrote that charges are imminent in the Serious Fraud Office investigation into Tesco. Investigators have been pulling together evidence to see if any individuals working for Britain’s biggest supermarket, or the grocer itself, acted illegally in inflating its accounts. A probe was launched in 2014, but The Mail’s sources say the SFO is close to forming a case. (The Daily Mail)
Also from Friday, growing competition from Amazon and pressure to pay its workers a living wage is forcing Walmart to close 269 underperforming stores in the United States and Latin America. The closures will affect up to 16,000 jobs, including 11,000 in the US, out of a worldwide workforce of 2.2 million. (The Times £, The Guardian, The Financial Times £)
After a number of stronger than expected Christmas trading updates from the supermarkets, The Guardian advises the beleaguered sector not to celebrate a turnaround quite yet. “Although sales are up at Tesco, Sainsbury’s and Morrisons it doesn’t mean Aldi and Lidl have been seen off – the discounter threat should not be discounted.” (The Guardian)
Agriculture experts warn that Britain’s pig farmers are braced for a horrendous year, as a glut of pork on the global markets sends prices plunging and prompts an increasing number to quit. Britain’s pig farmers make a loss of £7 on every pig slaughtered as global demand for pork lags behind supply. (The Guardian)
The Telegraph follows up The Grocer’s story that sales at Bernard Matthews have fallen by £30m last year despite an attempted turnaround by its private equity owners. Rutland Partners, which bought a majority stake for £25m in 2013, backed a further £10m cash injection into the food business in August to help fund its restructuring amid falling sales. (The Telegraph)
Brexit could create a nightmare scenario for Britain’s food and drink industry, where companies have to abide by EU food regulations if they want to export to the EU but have no say over the regulations. The UK’s food and drink firms would have to meet EU food laws to export but have no power to influence those rules, says analyst Kate Trollope. (The Guardian)
Finally, the papers also feature the latest BRC/Springboard footfall data which shows a slump in high street traffic. “Shoppers shun the high street but retail parks win”, says The Telegraph, “Christmas sales figures expose full depths of high-street woe”, says The Independent and “Scotland stands alone in UK with increase in retail footfall”, writes The Times (£).
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