No agenda BP. Just questioning what the Whs grocery strategy might be and where it’s going. Where I do my weekly supermarket shop is also a warehouse so I’ve been diverting a few of my hard earned dollars into their tills but I’ve noticed that outside their loss leader offers there really no competitive advantage I can see on most products. I’m probably their worst type of customer…I only buy their loss leaders and still get everything else from the supermarket.
the warehouse app says the butter offer ends 4 October…hence my prediction it will be ending…but I could be wrong.
Disc. been a shareholder a long time ago but not a believer anymore
Currently 1.2kg Weet-bix $4.49 at Pak'nSave and imo grocery offerings similar prices to Pak'nSave with limited stock items.
New World - Countdown perhaps nicer shelving but far more expensive so personally don't shop there.
Thats right. Stickman is on tv every week giving me reasons to visit. Been radio silence from Big Nick since he was in the media telling us all how he was committed to saving nz breakfast. So far he’s put the weetbix up 20% and the coffee 80%.
If I was a shareholder I’d want to know what we’re doing.
Thats right. Stickman is on tv every week giving me reasons to visit. Been radio silence from Big Nick since he was in the media telling us all how he was committed to saving nz breakfast. So far he’s put the weetbix up 20% and the coffee 80%.
If I was a shareholder I’d want to know what we’re doing.
Might have been a bit of an experiment to see how many incremental customers they could bring in to buy loss leading drygoods/butter/milk that would also buy a higher margin normal WHS product. IE, mgmt might guesstimate in their business case that the grocery initiatives might bring in an extra (say) 100 customers per store per day who spend (say) $20 on groceries at (nil/X% margin), but then (say) 10% of them go on to buy a normal WHS product for $x at x% margin, delivering the overall initiative greater GM dollars than without. All sounds good but you gotta test it, then play with the variables like pricing on groceries, to test the elasticities or bump them to earn the desired gross profit dollars. Food prices have risen anyway since they started the project (but not by the quantums you all are observing) so it could signal that the initiative wasn't delivering the expected incremental gross profit dollars. With hyper skinny EBIT margins and high overheads growing with inflation the WHS has bugger all room to accept margin erosion - operational leverage is great on the way up but is terrible on the way back down. If the project wasn't working, or was just increasing working capital and delivering de minimus increases in incremental gross profit, it would be a good thing for mgmt to increase margins on those grocery products even if it slows low/nil margin grocery sales.
Oddly enough, pairing back investment in "the market" likely to have a far greater impact on NBPT and ultimately dividends for FY22 and FY23, then tinkering with loss leading groceries in the hopes of driving incremental WHS sales. I reckon that could be done easily enough - a great but unknown portion of those massive markets losses are customer acquisition costs (ie google ads), which they could pull back on quickly, even if that means lower sales (but would translate into higher group profits). Depends on how gung ho the mgmt team is, how much they want to trumpet growing market sales, and how much slack they think they have with shareholders on losses. No spreadsheet or broker report is going to tell us the answer to that.
Good thoughts FM. The thing is everyone needs to eat something but not everyone needs to buy other widgets from Whs.
id happily spend some of my grocery dollars with Whs if they were something meaningful ie cheapest, multi buy discount but I’d struggle to find anything else in their stores that appealing.
Be interesting to see where it goes. We surely need more competition in groceries to keep everyone’s pricing sharp.
My observation of visiting stores since they starting selling groceries…is their loss leaders prices are too sharp and everything else is not
Good thoughts FM. The thing is everyone needs to eat something but not everyone needs to buy other widgets from Whs.
id happily spend some of my grocery dollars with Whs if they were something meaningful ie cheapest, multi buy discount but I’d struggle to find anything else in their stores that appealing.
Be interesting to see where it goes. We surely need more competition in groceries to keep everyone’s pricing sharp.
My observation of visiting stores since they starting selling groceries…is their loss leaders prices are too sharp and everything else is not
I was hoping that they could sell a lot of goods that don't need special storage for cheaper, and still make a reasonable GP%.
Then I suggested to them that they make shipping free if you bought over $30 of grocery items.
The marketing would be "buy your dry goods from us and we'll ship to your door, then buy your regular items at your supermarket. you make no more trips and still save money...."
However, I suspect you are correct FM that they are actually hoping for extra spending once people get into the store.
obviously not many people here follow AUS company reporting but i see the past ceo of noel leeming ( they report he is credited for the surge in sales at noel leeming ) has joined jbhi fi as nz ceo. loss for warehouse ?
Warehouse guy who left last year now CEO JB HiFi NZ
Noel Leeming have lost market share since he left (using that sector of Stats NZ Retail sales as a market proxy) .... and JB last few quarters sales growth has been better than NL..... and new guy jsut started
Hmmmm
Last edited by winner69; 16-08-2022 at 04:01 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Warehouse guy who left last year now CEO JB HiFi NZ
Noel Leeming have lost market share since he left (using that sector of Stats NZ Retail sales as a market proxy) .... and JB last few quarters sales growth has been better than NL..... and new guy jsut started
Hmmmm
Considering it takes normally around five years before the impact (good or bad) of a new CEO funnels through the organistation down to the bottom line ... I'd say that's just coincidental ...
Noel / Leeming / WHS probably gave him a top reference as well so that JB HiFi couldn't resist ...
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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Originally Posted by Perky
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