SUPERMARKETS – AUSTRALIA

New era as Coles breaks free

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Original article by Eli Greenblat, Sarah-Jane Tasker
The Australian – Page: 17 & 20 : 22-Nov-18

Shares in Coles Group closed at $12.75 on 21 November, after the stock listed at $12.49 following its demerger from Wesfarmers. Coles has a market capitalisation of about $16bn, ranking it among Australia’s 20 largest listed companies. Alphinity Investment Management’s Bruce Smith expects some volatility in Coles’ share price in the near-term, as investors decide whether to buy into the stock or sell their holdings. Vertium Asset Management’s Jason Teh adds that Coles has a higher level of higher investment risk than grocery rival Woolworths.

CORPORATES
COLES GROUP LIMITED – ASX COL, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, VERTIUM ASSET MANAGEMENT PTY LTD, WOOLWORTHS GROUP LIMITED – ASX WOW, WESFARMERS LIMITED – ASX WES, ALDI STORES SUPERMARKETS PTY LTD, COSTCO WHOLESALE AUSTRALIA PTY LTD, AMAZON.COM INCORPORATED, SOUTH32 LIMITED – ASX S32, SUNCORP GROUP LIMITED – ASX SUN, ARISTOCRAT LEISURE LIMITED – ASX ALL

Coles finally checks out from Wesfarmers

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Original article by Eli Greenblat, Paul Garvey
The Australian – Page: 19 & 29 : 16-Nov-18

The demerger of grocery giant Coles was supported by more than 98 per cent of votes cast at a special meeting of Wesfarmers shareholders on 15 November. The Perth-based conglomerate will retain a 15 per cent stake in Coles when its shares begin trading on a deferred settlement basis on 21 November. Wesfarmers chairman Michael Chaney has dismissed any concerns about an overhang, stressing that the company intends to retain its Coles stake in the long-term. Wesfarmers shareholders will be allocated Coles shares on a one-for-one basis.

CORPORATES
WESFARMERS LIMITED – ASX WES, COLES GROUP LIMITED, BUNNINGS GROUP LIMITED, WOOLWORTHS GROUP LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, AMAZON.COM INCORPORATED, METCASH LIMITED – ASX MTS

Woolies to return $1.7b to shareholders

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Original article by Sue Mitchell
The Australian Financial Review – Page: 16 : 13-Nov-18

Shaun Cousins of JP Morgan estimates that the sale of Woolworths’ fuel retailing business will reduce earnings per share by 7.4 per cent in 2020 and 8.1 per cent in 2021. However, the impact on EPS would be lower if Woolworths opts to return the proceeds of the sale to shareholders via a buyback. Woolworths is widely tipped to return most of the sale proceeds to investors, having initially flagged its intention to use some of the funds to reduce to debt and finance store refurbishments.

CORPORATES
WOOLWORTHS GROUP LIMITED – ASX WOW, JP MORGAN AUSTRALIA LIMITED, EG GROUP, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, BP PLC, CITIGROUP PTY LTD, BIG W DISCOUNT STORES, AUSTRALIAN LEISURE AND HOSPITALITY GROUP LIMITED, ENDEAVOUR DRINKS

Woolworths lures back fickle shoppers to regain share

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Original article by Sue Mitchell
The Australian Financial Review – Page: 17 & 24 : 2-Nov-18

Woolworths has advised that its Australian supermarkets recorded same-store sales growth of 1.8 per cent in the September quarter, compared with 3.1 per cent in the three months to June. In contrast, Coles posted same-store sales growth of 5.1 per cent, due to its successful Little Shop promotion and its decision to extend an offer of free reusable shopping bags. However, Woolworths CEO Brad Banducci says same-store sales improved in September and October. Woolworths’ average food prices fell by one per cent in the September quarter as it extended price discounts to more grocery products.

CORPORATES
WOOLWORTHS GROUP LIMITED – ASX WOW, WOOLWORTHS SUPERMARKETS, COLES SUPERMARKETS AUSTRALIA PTY LTD, BIG W DISCOUNT STORES, ENDEAVOUR DRINKS, AUSTRALIAN LEISURE AND HOSPITALITY GROUP LIMITED, DEUTSCHE BANK AG

Rising food prices to stoke CPI

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Original article by Sue Mitchell
The Australian Financial Review – Page: 1 & 8 : 19-Oct-18

Consumers have been told to expect to pay more for their weekly food bill, due to factors such as the weaker Australian dollar, higher fuel prices and drought-related crop shortages. Food prices at Coles increased for the first time in almost 10 years in the September quarter, while the major supermarket chains have indicated that they are prepared to pass on supply-driven price rises in food categories such as chicken and bread. Meanwhile, National Party MP Llew O’Brien has called for a royal commission into Coles and Woolworths over what he claims is their failure to support farmers during the drought.

CORPORATES
COLES SUPERMARKETS AUSTRALIA PTY LTD, NATIONAL PARTY OF AUSTRALIA, WOOLWORTHS GROUP LIMITED – ASX WOW, AUSTRALIAN FOOD AND GROCERY COUNCIL, INGHAMS GROUP LIMITED – ASX ING, RESERVE BANK OF AUSTRALIA, AUSTRALIAN BUREAU OF STATISTICS

Coles shifts focus from price to convenience

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 & 20 : 16-Oct-18

Coles’ Little Shop plastic groceries promotion helped it to achieve a 5.1 per cent increase in same-store food sales in the September quarter, as did its free plastic bags offer. However, new MD Steven Cain said it is unlikely to achieve the same sort of growth in the December quarter. With Coles in the process of becoming a stand-alone company as it demerges from Wesfarmers, Cain says his priorities include making life easier for customers by adopting new convenience store formats and improving its online business.

CORPORATES
COLES SUPERMARKETS AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, WOOLWORTHS GROUP LIMITED – ASX WOW, CITIGROUP PTY LTD

Wesfarmers to outline Coles move

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Original article by Eli Greenblat
The Australian – Page: 19 : 4-Oct-18

There is speculation that Wesfarmers could release the scheme booklet for its proposed demerger of Coles before 15 October, when the supermarket chain will announce its sales figures for the first quarter of 2018-19. JPMorgan has upgraded its forecast for same-store sales growth from 2.5 per cent to four per cent. In contrast, the firm has scaled back Woolworths’ same-store sales growth expectations from 1.8 per cent to 1.3 per cent. However, Shaun Cousins of JPMorgan expects Woolworths to outperform Coles in the medium-term.

CORPORATES
WESFARMERS LIMITED – ASX WES, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS SUPERMARKETS, WOOLWORTHS GROUP LIMITED – ASX WOW, JP MORGAN AUSTRALIA LIMITED

Morrison resists milk levy

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Original article by Phillip Coorey
The Australian Financial Review – Page: 6 : 6-Sep-18

Agriculture Minister David Littleproud has proposed the adoption of a temporary $0.10 per litre on milk to help dairy farmers who are struggling with the drought and low milk prices. He says that Woolworths has indicated it was willing to support such a levy, which would raise around $250 million a year, provided that Coles did. Littleproud says he has spoken to the Coles CEO, who indicated to Littleproud that he is not so favourably disposed to the idea. Prime Minister Scott Morrison has indicated he is reluctant to support Littleproud’s proposal.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF AGRICULTURE AND WATER RESOURCES, WOOLWORTHS GROUP LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD

The battle for the $2.9bn fresh bread market

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Original article by Roy Morgan
Market Research Update – Page: Online : 3-Sep-18

Australia’s $2.9 billion fresh bread market is dominated by the two supermarket giants Woolworths Group and Coles Group who represent a combined 51.9% of the fresh bread market, according to the latest Roy Morgan results in the year to June 2018. Supermarkets now comprise over two-thirds of the entire fresh bread market, with the remaining 31% split between specialty bread shops including Bakers Delight, Brumby’s Bakery and other bread shops, and between delicatessens, milk bars, convenience store and other stores. Roy Morgan CEO Michele Levine says although Woolworths and Coles have now comprised over 50% of the fresh bread market for over five years, the success of Bakers Delight and Aldi in growing market share shows there is space for nimble competitors.

CORPORATES
ROY MORGAN LIMITED, WOOLWORTHS GROUP LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD, BAKER’S DELIGHT HOLDINGS LIMITED, BRUMBY’S BAKERIES HOLDINGS LIMITED, ALDI STORES SUPERMARKETS PTY LTD, IGA DISTRIBUTION PTY LTD

Woolworths, Caltex in food-fuel deal with $2bn IPO on the cards

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Original article by Eli Greenblat
The Australian – Page: 19 & 31 : 6-Jul-18

Grocery giant Woolworths will expand its existing alliance with fuel retailer Caltex Australia. The deal includes a 15-year wholesale fuel supply agreement, the extension of Woolworths’ customer loyalty program to more than 700 Caltex petrol station and the rebranding of up to 250 Caltex outlets under Woolworths’ Metro banner. Woolworths CEO Brad Banducci says the petrol station joint venture could ultimately be spun off, potentially within the next 12 months.

CORPORATES
WOOLWORTHS GROUP LIMITED – ASX WOW, CALTEX AUSTRALIA LIMITED – ASX CTX, BP AUSTRALIA LIMITED, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, 7-ELEVEN STORES PTY LTD, DEUTSCHE BANK AG