A busy weekend for retail as the papers focus on the much-anticipated first-half results for Tesco, with Morrisons and Sainsbury’s also getting a look in, as well as the awaited takeover bid from AB InBev for SABMiller.
The Sunday Times led its business coverage with a look ahead at the Tesco interims. It said the pressure was set to be cranked up in CEO Dave Lewis as a result of an expected slump in operating profits to below £400m, way below the £916m in the same period a year ago. However, the declibe in sales should have slowed to 1.5% — an improvement on a 4.6% drop last year. “It will lead to louder calls for Dave Lewis to spell out his turnaround strategy to the City,” the paper said. “It will also intensify speculation that the chief executive will be forced to tap investors for billions of pounds of fresh capital through a rights issue.” The Mail on Sunday added that any stem in falling sales would come after what has been a “traumatic year” for the supermarket.
The pressure is certainly mounting on Lewis, with this morning’s business comment in The Times saying he hasn’t been “drastic enough” in his first year in charge. “As a provider of food, it remains vital. As an employer, well, there are worse. As a business, it seems to be going nowhere. Dave Lewis, the chief executive, has been in place for more than a year. The City dubbed him Drastic Dave because it likes alliteration and thought that he would be. Now City retail-watchers are saying, in private anyway, that he hasn’t been drastic enough. His direction of travel remains uncertain and lacks ruthlessness.”
Following the lack of any official statements from AB InBev or SABMiller last week, there is expected to be some movement any day. The Telegraph reports that the takeover battle will intensify this week as the Stella owner gets set to table an improved £70bn offer. A short article in The Daily Mail added that the £180bn tie-up between the brewers could be sealed this week. The Sunday Times looks behind the scenes of the deal, pointing out that a key member of SAB’s board could be forced to sit out negotiations due to a conflict of interest. Geoffrey Bible, the former boss of cigarette maker Altria, owns millions of pounds worth of shares in both companies, meaning, under British company law, he could be excluded from involvement in SAB’s final decision on whether to accept AB InBev’s advances. The paper said Bible’s absence “would be a blow to both sides”.
Elsewhere, The Financial Times reports an investment group backed by South African retail tycoon Christo Wiese has continued its assault on the UK high street by buying a further 38% stake in Iceland. The £172m deal pushes the company’s share of the frozen food retailer to 57%.
The FT also picks up that Morrisons has finally pulled the plug on its Match & More price matching scheme with plans to replace it with a loyalty card.
The Sunday Telegraph has aired a potentially embarrassing story for Sainsbury’s revealing that accounting watchdog the Financial Reporting Council has written to the retailer to question its accounting of supplier income disclosures in the wake of last year’s Tesco scandal.
Finally, premium mixer brand Fever-Tree has signed a deal with Marks & Spencer to be stocked in 300 Simply Food stores across the UK (The Telegraph).