"The first supercenter is a serious, impressive effort by Wal-Mart, unlike anything it has attempted (except experimentally) in the U.S.," Caicco wrote in a research report. "It is working hard to develop a hybrid discount shopping experience that will match up well with the needs of Canadians, and is also introducing products to support its position."The analyst thinks Loblaw's, Canada's leading supermarket chain, will be hurt:
He believes that Wal-Mart Canada will adopt a regional (as opposed to national) pricing strategy, matching discount stores on at least 200-400 core items, while making aggressive pricing "statements" on a few important categories. All other items should be priced at least 10% below conventional players, he added.
... a key difference between the two companies is that, as Wal-Mart has pushed its core general merchandise business forward while methodically expanding into food, Loblaw has let its core food business "stagnate" in its effort to broaden its general merchandise assortment ...India: Forbes reports more on the battle among Tesco, Wal-Mart, and Carrefour to partner with Bharti in India. We reported on it here last week.
In addition, the International Herald-Tribune reports on the effect of the coming superstore invasion on the 12,000,000 mom & pop stores who currently hold 95% of the Indian grocery market.
I was fascinated by the fact that 40% of Indian produce currently goes to waste and never reaches the consumer, because of the inefficiency of the supply chain. What could lowering that percentage significantly mean in terms of alleviating hunger, and lowering prices to India's poor?
Small shops are chronically wasteful, lifting prices 20 percent higher than they are in big stores. They buy in small quantities. They have no expertise in inventory control and category management, so they fail to buy the most profitable mix of products: At Nutan Stores on Carmichael Road in Mumbai, a typical operation, the offerings include such slow-moving items as dipping ink, birthday candles and oil pastels.Of course, those millions of mom & pops are going to feel some pain.
Devraj Damji Pasad, a 63-year-old co- owner of the store, said the arrival of a single supermarket a few miles away had cut his store's sales by 60 percent, forcing the dismissal of 7 out of 11 workers. He used to sell 36 bottles of ketchup a month, he now sells fewer than six.It will be a period of tremendous gain and pain:
But small stores are still indispensable to Indians. They provide credit. They deliver 20 cents worth of medicine to a home at midnight. So a war is gathering between the efficient but sterile supermarket and the neighborly but wasteful mom-and-pop store.Australia: Coles Meyer has turned down another takeover offer, and this time it appears to be final.
Last month, we reported on rumors that Wal-Mart and Tesco might be interested in buying CM.
Australia's second-largest retailer knocked back a revised takeover bid from the syndicate headed by Kohlberg Kravis Roberts (KKR), saying the $18.2 billion offer still substantially undervalued the business.
The group, which had been chopped down to five members from the original nine, gave the board a deadline of 9am on Monday to decide on the $15.25 a share offer.
However, after again being rejected by the Coles Myer board, the KKR-led syndicate announced after the market closed on Thursday that it had withdrawn its proposal.