Veritas Media’s Post

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.

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.

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

Interesting stats on the UK Grocery market !! Both volume growth and share gains and losses It will be interesting to watch as we enter the power quarter of the year !! A focus on the modern shopper needs , simplicity of execution and shopper value will all be critical to win Q4 📈 #retailinsights #fmcggrowth

Today's food for thought comes from #Canada and Loblaws Inc announcement of its opening 3 #NoName" discount stores in Canada. With 1300 SKUs, a high bargain-oriented private label and simple operations/limited opening hours it is an interesting way for Loblaws to try and reach a more discount oriented shopper. Some key points to keep in mind (especially for anyone reading this less familiar with Loblaws or Canadian retail in general (I can already feel the WHY DON'T US RETAILERS DO THIS? posts forming in the inter-ether :)...that may or may not be a good idea, but let's understand this one completely first). 1) No Name is not a new brand - Loblaws launched this discount private label in 1978 and for a short time in the 1980s it was the single largest consumer brand in Canada. Despite all of the well-deserved fame of President's Choice, No Name was Loblaws first super successful private brand - so this is not introducing a new brand to Canadians, just a new box. 2) The location of the stores is interesting - all 3 are in border towns that experience a lot of cross border shopping - Windsor (Detroit) and St. Catherine's (Niagra/Buffalo) abut large cities but the Brockville store is 15 miles from an Aldi near the Ogendsburg-Prescott border crossing in NY state). 3) Canadians are increasingly using the US as a value destination for grocery (exchange rate permitting)...I'll post a TikTok of some Canadians discovering Aldi in the comments. As US interest rates seem set to fall other things being equal that means a weaker US$ and more cross-border arbitrage opportunity. 4) Loblaws is coming under fire from shoppers for their pricing - in some categories they're over 50% of the Canadian market. A Reddit-centered boycott of Loblaws based on pricing was kicked off in July. 5) Everyone over 35 just rolled their eyes at the words "Reddit boycott" but it's not just that - the Canadian government is apparently actively courting international grocers to set up operations in Canada to challenge Loblaws (including Aldi and Lidl - Lidl almost entered Canada 20 years ago but scuttled the plan). Link to that article in comments as well. So what we have here isn't a retailer launching a new brand but a retailer taking a well-established brand and crafting a format to meet a range of shopper, reputational and political objectives. At Retail Cities our goal is to help you understand what to learn from global retail, but also what not to! No food for thought tomorrow - have a great weekend! https://lnkd.in/eaHpAxFa

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

I received a couple of requests to look at the gross margin history for Loblaws and other Canadian grocers. It is not a perfect comparison because each grocer has a different year-end, but I think it shows that Loblaws has been doing a pretty good job at expanding its margin compared to the other grocers. I did look at Loblaws even farther back - the margin was comparable to the 2020 result. Thanks to Jason Gray and Ben Bisset, CPA, CA for their suggestion on this post. Loblaws (Dec 31st year-end) 2020 - 30.3% 2023 - 32.0% Sobeys (Apr 30th, year-end) 2020 - 19.9% 2023 - 19.7% Metro (Sept 30th, year-end) 2020 - 24.9% 2023 - 23.9% #loblaws #groceryprices #grossmargin

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

I find it strange 🤷♂️ that a magazine like Inc. fails to address perhaps the most important question: If Carrefour drops Pepsi for price increases, what is/are the real reasons for this? The article should mentioned that Carrefour has been smart enough to market a "Cola Category" as follows: 1) Coca Cola, the Category King 👑 2) Breizh Cola (the local hero brand) 💪 3) Carrefour Cola, its own brand as a cheaper alternative 💰 So in short, not room for another player on the shelves 🙁 Adding a photo of Carrefour's own Cola below. #categorymanagement #retailstrategy #segmentation

Kathleen Wong, CPA, CA, CFA, our Consumer Staples & Consumer Discretionary Senior Analyst, was interviewed by @The Toronto Star about the well-publicized boycott of Loblaw Companies Ltd. (TSX: L) to protest high prices. Investors remain confident in Loblaw because, in the middle of an affordability crisis, when consumers are looking for value, Kathleen's analysis has shown that Loblaw's prices have been coming down and are on par, and in some cases even better, than those of its competitors in Canada. Most shoppers want to cut costs on their grocery bills, so it's hard to convince them to turn down a deal, especially if it involves a longer trip. "Investors are grocery shoppers just like you and I," she said. Kathleen completes quarterly pricing surveys of Canadian grocers to determine which grocers are able to pass along price inflation to consumers to maintain their profit margins. Loblaw's internal food price inflation has historically tracked closely with industry food price inflation, but it was lower than the industry's CPI during the past three quarters due to discounts and promotions to attract shoppers, Kathleen wrote in her most recent report on the company. https://lnkd.in/eiyrw3be #grocers #investmentresearch #equityresearch #investors