Hi Cooler, agree re discounters.- I'd also not use "delusional" re any posts here. However, only natural that we all have different targets & timescale for getting there, be it pros or PIs. Much can happen in this, or any, sector over next 10 years, but I've no doubt that in the years ahead, all large retailers will be in a far better place. - ATB! Catch up later.
Always been a discounter.
Hi Jack and everyone. I don't think 400 is delusional at all, I will go even further and say if the 3 or 4 conditions are met we could see a share price of over 600 in the nxt 10 years. As for discounters, its not a new thing we've always had discounters, people add too much to Aldi or Lidl, but even better are Iceland and Farmfoods.
The big question? - IMHO, discounters won't ever disappear like KwikSave did. Both Aldi & Lidl are huge in Europe. Aldi about 9,000 stores, Lidl 10,000. This gives them considerable bulk-buying power at discount. Also fewer overheads. They also pay less UK tax for having overseas HQs. A generally poor economy recently was also like manna from heaven for them. However, IMO, their expansion plans liable to be finite as UK economy improves & larger retailers get their act together, regardless of discounter ambitions. Carrefour & other retailers already regained much lost ground in France forcing 150 discount stores to close in 2013 alone. I've posted this before, but it's worth scanning for those who haven't. http://uk.reuters.com/article/2014/10/20/uk-retail-europe-france-britain-idUKKCN0I919Y20141020 Carrefour announced profits rise again yesterday. IMO, food prices unlikely to be squeezed much further. Even Aldi & Lidl are offering discount vouchers & all suppliers are seriously hurting. So maybe it's not so much about winning the war, though I know you don't mean that precisely, but I think there's an excellent chance for large retailers to regain significant lost ground. - ATB!
And GLA , on the 2pm GM vote today, to legitimize the payment of Dividends & Buybacks for the past 2 years...
But can we win the war on the discounters first, there's always a "what if"
Indeed re "slim lining". But that's also liable to bring greater all round efficiency to larger retailers. Margins may remain squeezed for some time, but a solid management will seek further rationalization to cut needless expense, keep prices competitive &, maybe, still increase profits slightly in a tough climate & pay decent divi - be reassessment of latter likely. Fact is, as much as Dalton achieved, he also wasted many millions over years. New BoD will run a much tighter ship. I'd place a wager on that as a sure thing. Also, some of these views talk of a return to circa 320+ for MRW's as "fair value", which we grant may not be seen for a few years. But when food prices recover, as in time they will, ditto wages, it won't take much of a rise on essential food items for large retailer profits to rise substantially. Before then, let's see if we can have a bash at circa 210 in run-up & including next week's results. - ATB & GLA.
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