Paul Cabry

Today, we announced Asda’s trading update for the first quarter of this year, with total revenues increased by 6.6% to £5.3bn (excl. fuel) and like-for-like sales up 1.4%. We’re pleased to see continued growth across our food and non-food businesses during the quarter, which clearly demonstrates our underlying strength as a business. In the first quarter, our focus has remained on delivering uncompromising value for customers. We became the first supermarket to price match both Aldi and Lidl, have continued to cut prices on hundreds of products, and have seen our Asda Rewards loyalty scheme continue to resonate with shoppers. George at Asda has also led the way in outperforming the fashion and homewares markets, as customers continue to respond positively to the investments made in the brand. We are proud to have become the highest paying traditional supermarket with a record £150m investment in retail pay this quarter, as we continue to invest in our hard-working colleagues. Net leverage as a multiple of proforma EBITDA after rent reduced from 4.1x at Q1 2023 to 3.0x at the end of Q1 2024 – and earlier this month, we successfully refinanced more than £3.0bn of debt, extending our debt obligations into the next decade. This further strengthens our capital structure, enabling us to continue investing in our business and deliver our ambitious long-term growth plans. You can find the full results here:

295

4 Comments

“The comeback is always greater than the setback” The below article 👇 helps give the context. At Morrisons we lost warehouse management systems (WMS) over fresh, produce and bread. 21 warehouses, 7 geographical locations. Total network. Down. No contingency, system wise paralysed. 1m cases on the floor 0.5m on supplier vehicles waiting to come in….. What do you do? 🤔 Game Over? We pressed continue… we cut a plan. Day 1 - we create a manual contingency, go back to the 90’s, creating picking sheets Day 2 - we get the sites back on time and re-align the ops clock, we apportion stock to stores to claw back lost capacity. Storm Bert hits just to keep us on our toes. Day 3 - we do a full stock take to re-set the depots but run to time. In parallel we set about creating a new instance of our warehouse management systems, (WMS) configure it and host it in-house from a standing start. New servers, new tin. Day 4 - live in our first site, all 3 chambers, on a new WMS. We build the WMS for site 2 by cloning and reconfiguring site 1. Day 5-10 we repeat, converting a site per night. No gap between implementations. Alongside this we re-count all 500 stores, all categories affected, to re-set stock record. We align inbound increasing demand daily and flow stock to each store / item combination needed. Was it perfect? No, but we re-set the business and replaced all systems in 10 days. Maintained business continuity throughout and stepped on availability every day from the lowest point. I’m not sure many case studies exist for this type of event on this scale but maybe we just created one. Has any other company rolled out a WMS to 21 warehouse chambers in 7 days? We’d like to claim this record and hope nobody else has to try and beat it. 🥇 I am incredibly proud of all the people who made this happen. They bought into the plan on day 1, they believed in it. We had a clear objective for each day of the recovery and a milestone to hit. They didn’t loose faith (in me or the plan) but each day became stronger and more creative. Teamwork and resilience off the charts. 🙏👏 If anybody wants an entry for “team of the year” or “achievement of the year” for their industry awards here’s my nomination on behalf of the team. They deserve to be recognised for what is an exceptional response to an unprecedented event. I would like to thank all our suppliers, partners and my connections for your direct support, understanding or empathy. I hope we will remain yesterday’s news 🗞️! Christmas 🎅 we are ready for you…

480

52 Comments

I heard mumblings about this a few weeks ago but was unable to confirm it. It seems Avalara has recently announced the suspension of their VAT services on Amazon. 👀 Coming from a more logistics-focused environment, I find it interesting how many UK-based businesses still rely on these rudimentary services to navigate the complexities of selling in Europe, even 4 years after Brexit! There are so many better solutions out there! I’m interested to hear any related thoughts or alternative solutions out there.💭💭💭 #VAT #Amazon #UKBusinesses #Ecommerce #TaxCompliance #Avalara #BusinessSupport #AmazonSellers #VATCompliance #UKBusiness #AmazonEurope #VAT #BusinessSupport

13

1 Comment

Morrisons will utilise long-standing tech partner Ocado’s fulfilment centres to help drive its move to more in-store fulfilment, as the bricks-and-mortar grocer reassesses its online grocery operations.

5

2 Comments

12 week kantar update. Similar theme as previous quarters…Tesco and Sainsbury’s lead the pack with a market share increases of 0.6% and 0.5% respectively. Interesting numbers for the shareholders as we head to the mid way point of many businesses financial year. No doubt both Tesco and Sainsbury’s are capitalising on the worrying decline at Asda. Another record low market share and on the back of scathing comments by Lord Rose. They are in desperate need of a captain to lead the rudderless ship. Is a CEO on the way? Discounters continue to accelerate with Lidl in pole position on terms of growth. Aldi slowing down but still in double digits and with the news they are launching instore bakeries that could drive some much needed footfall and volume.

12

Sainsbury’s sales soar as it makes biggest market share gains of any grocery Sainsbury’s sales soared in its first quarter as the supermarket said it had been winning customers from competitors every month for 15 consecutive months. In the 16 weeks to 22 June 2024, total sales grew 4.2% at the retailer, while grocery sales were even stronger, up 4.8% as chief executive Simon Roberts boasted of Sainsbury’s “market-beating grocery performance”. It came as the grocer saw a second year of volume growth and is winning more volume from primary customers than all other full-choice grocers, which it said is driving basket size growth “significantly ahead of all competitors”. During the first quarter, Sainsbury’s also had the biggest market share gains of any grocer with consistent net switching gains, it said. #sainsbury #marketshare #growth #retail #grocery #supermarket #competition #Aldi

1

Very Interesting to read Morrisons are trialing in-store AI to give real-time shelf stock information. Understanding enablement of immediate shelf replenishment, I am also fascinated by how this will inform the upstream activity in their RDC & NDC operations (on basis if stocks not arrived/stored locally it can't be replenished). We see increasing adoption of powerful store level demand forecasting AI facilitating correcter SKU quantity localised delivery and Focal Systems camera innovation I am sure will augment/inform this activity. #Grocery #AI #Automation

4

I am delighted to announce that today at Asda we are launching a new Sustainable Supply Chain Financing #SCF programme in conjunction with our banking partners at HSBC We are working working to better integrate sustainability into the way we do business. We ask suppliers to align with our goals and we collaborate with them to support action on decarbonisation, natural resource improvement and waste reduction. The enhancement we have announced today is designed to incentivise suppliers at different stages of maturity by encouraging and rewarding: - Engagement: With sharing credible ESG and carbon performance data - Commitment: To establishing ambitious decarbonisation targets - Action: Delivering on these commitments and achieving strong performance Or as we often talk about in retail in terms of brand hierarchy, good, better, best! Thanks must go to the team at HSBC team, and other supporting funding partners including Rabobank Great work Joe Prosho Ben Duckham Clair Smith @lloyd leak Neil Burn Kieran Good Matt Marsh #esg #scf #sustainability

70

1 Comment

There is concern amongst retailers for all riots including Leeds - let us not forget those which are clearly not under the global definition both the media and the government call right wing. Bottom line is this is an issue with immigration and integration increasing whilst poverty is increasing - this issue will only get worse unless you fix the root causes. It’s so easy to hide behind religion, race, beliefs to stir up trouble and this is what people do when nothing is done. The country has to stop the immigration, deal with it, cut the costs, get people back to work, get rid of the benefit culture and work on job creation and investment in Britain. Sitting behind divisive speeches fixes nothing. There should be zero tolerance for all riots full stop regardless of religion, colour or belief - no favourites or lapses because your party favours more toward one faction than the other. This is where governments go wrong and have done for 25 years. Time to reform time to change the leadership or just provide it where it has been lacking for so long

1

Is Ocado Technology’s CFC model losing relevance? Morrisons shifts to store-pick for online orders Morrisons is reshaping its online operations, opting to phase out deliveries from Ocado’s Erith customer fulfilment centre (CFC) in favor of an in-store picking model. This strategic move will see online orders increasingly fulfilled directly from store shelves while retaining some capacity at Ocado’s Dordon CFC. Morrisons’ CEO, Rami Baitiéh emphasized that the shift aligns with the retailer’s commitment to providing its customers full access to its unique Market Street offer. Despite these changes, Morrisons.com will continue to serve all postcodes across England, Scotland, and Wales without disruption to customers. For Ocado, this adjustment may provide additional short-term capacity for its Ocado Retail joint venture with Marks and Spencer, which is nearing full capacity in its network. However, market analysts are raising concerns about the viability of Ocado’s automated CFC model in light of broader trends. This move is part of a growing industry debate: can automated robotic warehouses outpace the efficiency and flexibility of store-pick models? With slowing online grocery growth in key markets, several Ocado clients, including Kroger in the US and Sobeys in Canada, have paused or scaled back their CFC plans. Morrisons’ decision could signal a significant shift in the UK grocery market, putting pressure on Ocado’s model to demonstrate its long-term scalability and profitability. #morrisons #ocado #ukgrocery #retailinnovation #ecommerce #onlineshopping #storepick #fulfillment #robotics #supplychain #aiinretail #retailtech #foodtech #salesstrategy #markettrends #groceryindustry #investorinsights #digitaltransformation #futureofretail #startuptrends #supplychainefficiency #uk #europe #fmcg #supermarkets

7

It's inspiring to see companies join forces to celebrate their successes and collaborate for the future. #Congratulations to DHL Supply Chain and SEPHORA on this partnership! Your teamwork highlights the power of collaboration in driving innovation and excellence in the supply chain, retail, and logistics industries. #SupplyChain #Retail #Logistics #BusinessCollaboration DHL Supply Chain Natalie Frow and SEPHORA Sarah Boyd #supplychain #retail #logistics #businesscollaboration

9

Mixed messages: the latest decision from the Bank of England monetary committee has been to lower interest rates, but the inflation messages are mixed.   Last month when the TEG came out from the Transport Exchange Group, I looked at how both the haulier and courier elements of this road transport price index moved in relation to diesel prices, and commented that as well as the courier index correlating more closely with diesel, it also had better correlation with light commercial vehicle traffic, as a proxy for demand, than haulage did with HGV traffic. https://lnkd.in/dJmdnk9r   So I thought it was time to put the courier index (yellow continuous line) and LCV traffic (brown dotted line) on the same graph. The TEG courier index is monthly and already available for July. The LCV traffic data comes from the DfT and is only available a couple of weeks after the month end, which is why it doesn’t get to the ‘end’ of the graph. The TEG index is based on the average ppm across the whole of the month for a variety of smaller vehicles, whereas I’ve used the Wednesday nearest to the middle of the month for the traffic index, which only started in 2020. https://lnkd.in/eaK_nTsh   I've chosen the scales to best demonstrate the pattern between the TEG courier index and the LCV traffic levels – not exact by any means, but they do move in a similar way, and when they don’t… note that diesel prices were low in 2020 at start of Covid in lockdown (when most people weren’t allowed to use their cars) and high from Spring 2022 (Ukraine), pulling the TEG away from the traffic index.   The other line is another price index, the SPPI for Other Postal and Courier Services (see note at end for description) which is shown as the orange dashed line – I’ve rebased it to start at 100 in Q1, so roughly the same as the TEG index. The SPPI moves more smoothly than TEG – partly because it includes more contractual deals and partly because being quarterly irons out the bumps – but, being quarterly, it’s always slightly behind the times, hence also not getting to the ‘end’ of the graph. In contrast, the TEG index, which represents spot rates, is available very soon after the month end. https://lnkd.in/eHFbaPHF   Whereas the SPPI index was showing annual inflation of more than 7.6% in Q2, the July Courier TEG was down to a mere 1.2% increase year-on-year.     Note: The SPPI from the ONS, is a series of quarterly indices – it stands for Services Producer Price Inflation and is like the CPI for consumer inflation but measures the changes in prices paid for services from UK businesses. Ref the courier index, ‘Other’ means that it’s not ‘Postal Services Under Universal Service Obligation’, which is mainly Royal Mail.

7

1 Comment

Forward logistics gets all the spotlight, but what about when products need to come back? Too often, return logistics is ignored. Below are pictures from my time in Oman in 2018 where I and some old colleagues completed an ammunition disposal of stock unsuitable to travel back to the UK —whilst this is one method, its not one we recommend... often Instead, solutions like Swap, ReturnGO, and ZigZag Global make returns simple and efficient, transforming a headache into a smooth process. #returnmanagement #ammunitiondisposal #bigbang #ecommerce

10

3 Comments

Very good overview of global issues at stake on eCommerce. What will be the way forward you think? Fair taxation and increased efforts to automate border controls without interrupting the flow of goods? https://lnkd.in/eK2cDT4G #eCommerce #PARSEC #EUHORIZON #HURRICANEcommerce #Customs #eCustoms #CBRAServices

7

2 Comments

What happened in retail this week? 👇 - Asda pushed its debt burdens into the next decade after refinancing more than £3.2bn of debt. - Lidl GB announced £500m investment in the British pork industry as part of its commitment to sourcing from British producers. - Morrisons completed the £2.5bn MFG petrol forecourts sale. - Sainsbury's underlying pre-tax profits for the financial year were up 1.6% to £701m ahead of company expectations and grocery sales soared 9.4% over the period. - Aldi UK revealed that between 8am-9am and 7pm-10pm are the quietest times for customers to pick up their shopping ahead of the bank holiday. - Pets at Home opened two more stores on London high streets as it branches out from its typical retail park sites. - Co-op furthered its 100% free-range offer by introducing a white egg range to 2,400 stores. - Aldi UK launched a nationwide initiative to pinpoint prime locations for new store openings and has asked Brits to identify which areas across the UK need a new Aldi store, with suggestions to be submitted by 31 May. - Farmfoods is targetting 20-30 new stores as annual turnover passes £1bn. — — — — — — — I post the biggest stories from the UK’s biggest retailers each week. Connect with me to never miss a weekly update. #Retail #News #May 

47