G41 Food Retailing

Woolies taps Best & Less boss for seat

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Original article by Sue Mitchell
The Australian Financial Review – Page: 17 & 22 : 17-Nov-15

Australian-listed retailer Woolworths is believed to have invited Holly Kramer to become a non-executive director. Kramer is on the boards of AMP and Nine Entertainment Company, having stepped down as CEO of discount department store group Best & Less in May 2015. Woolworths is seeking to appoint three directors to replace Ian MacFarlane, Christine Cross and David Mackay. It has also yet to appoint a successor to CEO Grant O’Brien, who may remain at the helm until his replacement is appointed.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, BEST AND LESS PTY LTD, AMP LIMITED – ASX AMP, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, BIG W DISCOUNT STORES, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, TESCO PLC, KELLOGG (AUSTRALIA) PTY LTD, RESERVE BANK OF AUSTRALIA, YALE UNIVERSITY, GEORGETOWN UNIVERSITY, FORD MOTOR COMPANY AUSTRALIA LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, PACIFIC BRANDS LIMITED – ASX PBG, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION, CGI GLASS LEWIS PTY LTD

Woolies credit outlook cut, rating questioned

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 6-Nov-15

Moody’s Investors Service has maintained Woolworths’ "Baa1" credit rating, although the retailer’s credit outlook has been downgraded from "stable" to "negative". Ian Chitterer of Moody’s attributes the move to factors such as disappointing sales for the first quarter of 2015-16 and Woolworths’ third earnings downgrade in less than a year. He has also expressed concern about the uncertainty concerning the timeframe for appointing a new CEO.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, BIG W DISCOUNT STORES, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

Woolworths dividend and rating at risk

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Original article by Sue Mitchell
The Australian Financial Review – Page: 17 : 4-Nov-15

Ian Chitterer of ratings agency Moody’s says Australian-listed Woolworths needs to take action to arrest a decline in same-store sales. Chitterer will meet with the retailer’s executives shortly, and he says Woolworths may need to consider measures such as asset sales and a reduction in its dividend payout. Moody’s downgraded Woolworths’ credit rating in August 2015, while Standard & Poor’s did so in late October.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, CITIGROUP PTY LTD, BIG W DISCOUNT STORES, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, TESCO PLC

Woolies drop raises fears of price war

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Original article by Sue Mitchell
The Australian Financial Review – Page: 17 : 3-Nov-15

Shareholders in Australian-listed food and grocery retailers fear that a price war may erupt again, threatening the value of their investments. UBS analyst Ben Gilbert believes that the risk of a price war is quite real, considering that the companies are determined to defend their market share. Woolworths shares declined two per cent on 2 November 2015 to a four-year low of $A23.60.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, COLES GROUP LIMITED, METCASH LIMITED – ASX MTS, WESFARMERS LIMITED – ASX WES, UBS HOLDINGS PTY LTD, NIKKO ASSET MANAGEMENT GROUP, ASDA GROUP PLC, LIDL GMBH & CO KG, TESCO PLC, J SAINSBURY PLC, ALDI STORES SUPERMARKETS PTY LTD

Woolies rewards to cost it $500m a year

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 27-Oct-15

Woolworths’ revamped customer loyalty scheme will reward shoppers for purchasing about 500 grocery items. The Australian Centre for Retail Studies estimates that it would take less than eight weeks for the average customer to cash in their credits for a $A10 reward. Michael Simotas of Deutsche Bank expects the new scheme to cost Woolworths around $A500 per year.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, AUSTRALIAN CENTRE FOR RETAIL STUDIES, MONASH UNIVERSITY, DEUTSCHE BANK AG, THOUGHTWORKS AUSTRALIA PTY LTD, QANTAS AIRWAYS LIMITED – ASX QAN, QANTAS FREQUENT FLYER LIMITED

7-Eleven workers’ back-pay begins

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Original article by Adele Ferguson, Sarah Danckert
The Australian Financial Review – Page: 16 : 23-Oct-15

The Allan Fels-led Wage Fairness Panel has begun processing the wage claims of current and former 7-Eleven employees. The panel will invite 15,000 past and present 7-Eleven workers to submit claims for back-pay in the wake of the wage exploitation scandal. Fifty claims for back-pay have been processed so far, and these employees will collectively be paid around $A1.1m. It is estimated that 7-Eleven could potentially have to pay around $A300m to settle all claims.

CORPORATES
7-ELEVEN STORES PTY LTD, AUSTRALIA. DEPT OF IMMIGRATION AND BORDER PROTECTION, AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS, FAIRFAX MEDIA LIMITED – ASX FXJ, AUSTRALIAN BROADCASTING CORPORATION

Coles spends $100m on keeping food prices low

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 & 18 : 23-Oct-15

Wesfarmers-owned Coles has reported that its food and liquor sales rose by 4.7 per cent to $A7.6bn in the September 2015 quarter. Grocery prices at Coles supermarkets fell by 1.3 per cent during the period, with the group spending $A100m on price cuts. Coles intends to maintain this level of spending in the next several quarters, in the wake of Woolworths’ plans to spend $A500m on cutting grocery prices. The Bunnings, Kmart and Target businesses also recorded sales growth in the quarter.

CORPORATES
COLES GROUP LIMITED, WESFARMERS LIMITED – ASX WES, WOOLWORTH CORPORATION, BUNNINGS GROUP LIMITED, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, ALDI STORES SUPERMARKETS PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Woolworths ‘treasure chest’ ready to open

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Original article by Catie Low
The Australian Financial Review – Page: 15 : 9-Oct-15

Bank of America Merrill Lynch analyst David Errington estimates that Woolworths could unlock about $A3bn worth of capital by streamlining its operations. He argues that Woolworths should focus on its core food and liquor business, while retaining its gaming division and offloading Big W and exiting the loss-making Masters hardware joint venture. The Masters business in particular may come under scrutiny when Woolworths completes its board renewal process.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, BIG W DISCOUNT STORES, LOWE’S COMPANIES INCORPORATED, CITIGROUP PTY LTD, TESCO PLC, KELLOGG COMPANY, RESERVE BANK OF AUSTRALIA

7-Eleven alters model but legal action possible

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Original article by Adele Ferguson, Sarah Danckert, Damien Murphy
The Australian Financial Review – Page: 8 : 9-Oct-15

At present 7-Eleven franchisees currently receive 43 per cent of their stores’ profits. However, the Australian convenience store chain has proposed a new business model with a sliding scale for the profit split, based on a franchisee’s earnings. Many franchisees who attended a meeting in Sydney on 8 October 2015 were not impressed with the new business model, which was developed in response to the wage exploitation scandal.

CORPORATES
7-ELEVEN STORES PTY LTD

Supermarkets cut prices in private-label drive

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Original article by Catie Low
The Australian Financial Review – Page: 27 : 8-Oct-15

Research by Deutsche Bank shows that Woolworths reduced the cost of its private-label grocery products by nine per cent in the September 2015 quarter. Rival Coles in turn reduced its house brand prices by seven per cent during the period. Meanwhile, the prices of branded products at Woolworths fell by 0.8 per cent and rose by 5.7 per cent at Coles. Woolworths says it has invested some $A250m on price reductions since early 2015.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD, DEUTSCHE BANK AG, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIAN BUREAU OF STATISTICS