Sunday, 28 December 2014

Weekend review

It's always tricky at this time of the year to rustle up decent jackanories but my old colleague Graham, "Ruddy", Ruddick hasn't done too badly this weekend.

Graham, who works at The Daily Telegraph and The Sunday Telegraph, got a decent line from his interview with Andy Clarke, the chief executive of Asda, about potential consolidation in Britain's ailing supermarket sector.

Graham quotes Clarke saying:

"There are less retail fascias on the landscape today then there were 10 years ago, five years ago, even three years ago,”


“If you look forward 10 years I am pretty sure there will be less again. Making a call on who is, of course, the big question. But I am sure there will be further consolidation.”

For investors following the sector, Clarke's view on what may happen next in the grocery industry is interesting, especially as shares in supermarket companies have fallen by on average 30pc since the beginning of 2013. Here is a link to the whole of Graham's piece:

But also Clarke's views - potentially - provide a snapshot into what Walmart, the US food giant that owns Asda, may be thinking about how consolidation will play out among Britain's listed supermarket giants.

Earlier in Graham's piece, Clarke says Tesco is still a “world class retailer” despite its well-documented problems, adding: “I am pretty sure that at some point they will recover and bounce back.” I'm not quite sure what to read into that comment but my initial presumption is that Clarke doesn't see Tesco as part of the "consolidation" he later speaks about in Graham's piece.

And it's not just Asda/Wal-Mart that is looking to exploit the current fall out taking place in the UK grocery industry. I understand Pepkor, Christo Wiese's investment vehicle, has been sniffing around one privately-owned retailer/grocer (and I don't mean BHS) although it looks like the deal is unlikely to happen for the time being.

I may have more on that story later in the week, so keep an eye on little old Betaville.

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