Bryan Gildenberg’s Post

Good post on the broader context of pricing. Informative, insightful.

The sooner Woolworths focuses in on what it is very good at which is running the best full range supermarket chain in Australia possibly the Southern Hemisphere instead of getting involved in making political statements like “the voice” & deranging Aust Day and make a political comment re the day itself the better we will all be. Like many others never in my 50 + years retail experience have I ever seen a company like Woolworths trying to dictate matters that are not their right to do so. Woolworths & for that matter Coles get involved in all sorts of culturally significant events like Lunar New Year, Ramadan, Diwali & others depending on the demographic. This is smart retailing & avoid a cookie cutter mentality. The least they could do is support Aust. Day festivities that in reality is more than likely more popular across the board than those mentioned. Is Woolworths Board & Executive team still in denial that over 60% Australians voted against “the voice” & then continue on with their Aust. Day stance. It just doesn’t pass the Pub Test,around the BBQ chat or even the water cooler catch up.

A social movement that began on Reddit is now gaining momentum. Are you someone who prefers to shop at local grocers? Or are you content with shopping at major retailers? An interesting article I came across discusses the factors that affect our food prices which describes a "perfect storm" largely outside the control of grocers and government. Where do you plan on shopping for your next grocery order? Let me know in the comments below⏬ #localgrocers #majorretailers #foodprices #groceryshopping #foodindustry

I've been hearing a lot lately about the Loblaw boycotts and like others have been impacted by rising food costs. Not going to take a side re. the boycotts, mainly because this is such a nuanced discussion. Firstly, the elephant in the room...for perspective, Loblaw takes between 35-50% markup based on list price vs say on the other extreme Costco's markup of 14-20%. Costco even goes further by sloping 20-25% lower at minimum vs average price in market for CPGs. It's easy to jump to conclusions here about price gouging, but the reality is that these are differing business models...membership vs non-membership and the numerous segments that exist...the same could be said about other grocery retailers. On the flip side, the EBITDA Margin for Loblaw vs Costco is 11.1% vs 4.4% in 2023...the smoking gun we need? Or is it that Loblaw is just a better operator and drives efficiency? I am sure there is an answer to all of this. The point is, its challenging for lay people to make sense of this, and its understandable that they make decisions based on the price tag...but things are more challenging than surface level.

New data from CHOICE has shown that approximately one in four individuals find it challenging to determine if specific supermarket labels represent a genuine discount or not. CHOICE asked over 1,000 consumers whether they could determine if a range of price tags photographed at Woolworths, Aldi, and Coles stores represented discounts on the usual price. Read more: https://lnkd.in/g7EGNmtW #FMCG #Grocery #Supermarkets #NZSupermarkets #SupermarketsNZ #NZGrocery #GroceryIndustry #GroceryRetail

Loblaws is doing everything it can to keep prices low. How can we test this position by the company? One way to look at it would be to compare the gross margin of various grocers in Canada and the U.S. Now, this is not a perfect method, since each company will have a different business mix, but it does give us some idea on the markup of goods relative to their cost. So, that's what I did. Here is the ranking based on the trailing twelve months based on information from Yahoo Finance. Every grocer on this list has over $20 billion in sales across hundreds of locations. 1. Loblaws - 32.1% 2. Albertson's - 27.8% 3. Sobey's - 26.1% 4. Wal-Mart - 24.4% 5. Kroger - 22.2% 6. Metro - 19.7% 7. Costco - 12.4% I may need to consider a membership at Costco. #groceryprices #comparisons #loblaws

(AUSTRALIA 13.02.24) ‘Trickery’: Supermarket multi-buy tactic criticised by shoppers. Shoppers have criticized supermarkets for employing tactics like multi-buy specials, with a recent photo of the chocolate aisle at Woolworths sparking debate. The deal offered three chocolate bars for $15, although each bar was individually priced between $5.50-6. Consumers questioned the small savings and whether such deals could be considered special offers. This discussion coincided with the ongoing Australian Competition and Consumer Commission's inquiry into the supermarket sector, which will examine retail price competitiveness and allegations of price gouging. Professor Nitika Garg from the University of New South Wales Business School explained the psychology behind such tactics, highlighting the dopamine rush consumers feel when securing a deal. However, she warned consumers to compare unit prices to ensure actual savings. Additionally, chocolate prices have been on the rise due to increasing input costs, particularly in cocoa, driven by supply issues in West Africa. https://lnkd.in/gzqzgP92

Discounter pricing and full breadth of range 🎉

Americana Restaurants reported a net income of USD 51.9 million in the second quarter of 2024, reflecting a 40.1% decline and falling short of the consensus estimate of USD 58.3 million. The group generated revenue of USD 559 million, a 14.2% decrease from the previous year. This downturn compared to 2Q23 was largely due to the ongoing boycott, which overshadowed the gains from new store openings. Despite the revenue decline, the gross margin improved by 98 bps to 54%, aided by favorable commodity prices. However, increased depreciation charges from new store openings negatively impacted the overall net profit.   The company opened a net total of 21 stores, bringing the total to 2,477 restaurants, up from 2,277 in 2Q23, with 36 new restaurants currently under construction. Management plans to add between 175 and 185 net new stores by the end of FY24.   Sequentially, sales rose by 13.3%, driven by recovery in key markets, fewer Ramadan days, and the occurrence of both Eid events in the second quarter, which contributed to a 230 bps improvement in gross margin. Net income increased by 85.3%, with the margin expanding by 360 bps to 9.3%.   Additionally, the company has received approval from ADX for a share buyback of 25 million shares from the open market, which will be allocated to eligible employees as part of their long-term investment plan. #Americana #FinancialResult

A study on a basket of 33 supermarket items revealed the latest price gap between Aldi and its competitors. Aldi was named the UK's cheapest supermarket. Read more: https://lnkd.in/gy_rdQjg #FMCG #Grocery #Supermarkets #NZSupermarkets #SupermarketsNZ #NZGrocery #GroceryIndustry #GroceryRetail