Following Tesco's results this week, we assess the key domestic and international priorities across these three key players.
•Walmart has turned a series of nine straight quarters of like-for-like decline into four successive quarters of growth, with LFL uplifts of 2.2% in its latest quarter. A US$2bn investment in price, along with range expansion and multi-channel innovation have been critical to the turnaround. New space growth reflects a switch to smaller formats.
•Carrefour continues to contend with a challenging outlook at home, with like-for-likes down 3.3% in the latest quarter. A high reliance on hypermarkets, combined with weak demand and a price-focused and highly capable competitor set, have been key domestic challenges. The Planet concept for hypermarkets meanwhile has only delivered some of the answers. M. Plassat, recently arrived as CEO, is seeking to rollout the best elements from Planet more widely, while refocusing its proposition on EDLP
•Tesco, meanwhile, has reported an improvement in performance, reversing six successive quarters of like-for-like sales decline. A £1bn plan, designed to reposition food at the heart of the offer and to enhance its proposition across key areas including range, value and formats, is paying early dividends. Click here for our full analysis of the Tesco results.
Differing international priorities
•Walmart remains a growth oriented business, and increasingly its scale efficiency is being leveraged to drive a competitive advantage internationally; every market in positive like-for-like growth last quarter. Progress continues to be made on its long-term goal of establishing its EDLP model in each of its markets, although flexing locally remains a focus: this is being implemented in Brazil, for example, where Walmart recognises there is a customer education process to precede EDLP in what is a promotionally focused market.
•Carrefour has been impacted by its exposure to Southern Europe. But the retailer is well positioned across its wider international activities. It has successfully prioritised markets, with Latin America in particular is a big positive, and Brazil a standout market that continues to deliver impressive sales growth and profitability. A focus on becoming more local and driving online capability across non-food and food are also high on the agenda.
•Tesco meanwhile, following a long period of impressive international growth, is now encountering headwinds in several key markets. Legislative (in South Korea) and economic (in Europe and China) factors have impacted performance, though Tesco's drive to build convenience and online across its business will bring longer term benefit, neatly dovetailing with what are strong positions in several key Asian markets.
Meat Trade News Daily Supporting British Pig Farmers
Source: Argentine Beef Packers S.A.
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