?It's been a tough year for the top overseas and private equity-owned chains - none more so than Kwik Save. Since its split from Somerfield, it has endured the departure of four MDs, plummeting market share, shocking availability and speculation it would be broken up. The future looked bleak - until a former MD stepped back into the frame.
Last week, a private consortium of investors, led by Paul Niklas, announced a £50m rescue package for the Kwik Save Group (formerly known as Back to the Future). Niklas, who is chairman and CEO of the new operations board, is now intent on sorting out the chain's crippling supply issues. "I will be working hard to develop relationships with existing and new suppliers to ensure stock is replenished to acceptable levels before implementing a long-term strategy," he says.
Whether he succeeds remains to be seen but Kwik Save is not alone in feeling the heat. Online retailer Ocado is facing further losses this year as it ploughs more money into building the business, according to the John Lewis Partnership, which owns a 29% stake. "Substantial" investment has gone into Ocado's distribution network over the past year and while turnover rose 69% to £152m for the year to 27 November 2005, pre-tax losses widened from £41m to £45m.
Wine merchant Oddbins reported a loss of £3m for the year to 31 December 2005. Turnover was down 4.21% to £121.9m, which compounded a 3.9% decline in sales the previous year. Oddbins blames a "really tough high street" for the dramatic downturn. It has reduced its HQ headcount and is selling 50 unprofitable stores in a bid to reverse its fortunes. Meanwhile, sales at Fresh & Wild, owned by Whole Foods Market, were down 5.69% year-on-year for the period to 25 September 2005. Despite a £2m loss, Whole Foods Market may now keep the existing Fresh & Wild fascias and use the branding on some own-label products when the new Whole Foods Market store opens in June.
However, Iceland, bought by a Baugur-led consortium in 2005, is in turnaround. After scathing attacks on the previous management's performance by prodigal CEO Malcolm Walker, its like-for-like sales were up more than 17% and it is now in profit.
A leaner Thresher Group - 1,395 jobs have been shed - is also thriving. The impact of its buy 2 get 3rd free promotion helped the company record a 38% increase in turnover to £885m for the year to July 2006. More controversial was a 40%-off e-voucher intended for staff and their families, which got into the hands of thousands of shoppers.
Debate rages over whether this was a stroke of marketing genius or a near-disaster, but Thresher CEO Roger Whiteside claims it was responsible for the high street's outperformance of the multiples over Christmas (The Grocer, 27 January) and promises a positive impact on the next P&L.
Julian Graves is also on the expansion trail. It trades from 312 outlets, up from 220 in 2004. MD Nick Shutts says the company has found it easier than conventional c-store operators to buy sites because it is looking at a different demographic - the prosperous pensioner, wealthy achiever and secure family. Turnover is up 29% to £52.3m and profit up 61.9% to £3.2m. n