Squiz Today / 06 February 2018
Squiz Today – Tuesday, 6 February
“They don’t like to crunch too loudly in public. And they don’t lick their fingers generously and they don’t like to pour the little broken pieces and the flavour into their mouth.”
PepsiCo CEO Indra Nooyi says women eat chips differently to men, so they're going to launch a range of lady snacks. She hasn't seen us attack a packet recently…
WESFARMERS TAKES A $1B HIT WITH UK BUNNINGS
Wesfarmers – one of Australia’s top 10 companies and our largest employer – had a bad day at the office yesterday. New CEO Rob Scott announced it would write off $1 billion in the value of its great UK Bunnings adventure, and $300 million from the value of discount department store Target. Investors weren’t impressed. The company’s share price fell 4.5% by the end of trading yesterday.
WHAT’S THAT ABOUT?
This is an epic tale of two businesses – Wesfarmers and Woolworths. Three quick points:
• Woolies was dominant from the mid 90’s until Coles got its act together after Wesfarmers bought the failing supermarket chain in 2007. Woolies was doing so well it decided to expand by creating Masters - its version of a big home improvement store.
• Masters never really worked which dragged Woolworths’ supermarkets into the doldrums while Coles and Bunnings made hay for Wesfarmers. So much hay that a couple of years ago it decided to take its highly successful Bunnings format to the UK.
• But it seems British DIY enthusiasts haven’t taken to the idea with the gusto of their colonial cousins – meaning Wesfarmers is now a bit stretched. Meanwhile, after deciding to ditch Masters in 2016, Woolies supermarkets are now kicking goals at Coles’ expense.
What goes around comes around…
WHAT HAPPENS NEXT?
Scott yesterday said; “We need to address underperformance in our portfolio that is detracting from positive performance in other areas…” So he’s mindful of the impact the UK venture could have on the broader group and pulling the plug on their UK home improvement dreams could be an option. But for now, it's under review, and more will be said about it in June.
SQUIZ THE REST
A TOUGH DAY FOR THE MARKET TOO…
In fact, the Australian Stock Exchange clocked its worst day since June last year. What happened?
• Markets around the world, including ours, are concerned that the strengthening US jobs market might lead to increased inflation and higher interest rates. Got it? Good.
• In total, the ASX was down 1.6%, wiping $30 billion from the value of our share market.
• Along with Wesfarmers, another stand out was McGrath (the embattled real estate company) which finished the day down 6.3%. Investors weren’t impressed by reports alleging boss John McGrath owes an online betting mob $16 million. McGrath says the reports are rubbish.
THE POWER OF THREE
Parliament yesterday had a case of back to work blues so we're not going to indulge it by paying heed to any of the carry-on. Except for this:
• Right-wingers Cory Bernardi, ex-One Nation’er Fraser Anning and Lib-Dem David Leyonhjelm have agreed to vote together on some things.
• That could make PM Malcolm Turnbull’s life more difficult because his government will likely need all three of them to support key legislation. So it’s more than a pact to sit together at lunch. This threesome could turn out to be quite powerful.
ZUMA PRESSURED TO ZOOM OFF
South African President Jacob Zuma is under pressure to resign. While his term does not end until next year, reports say senior members of his ANC party want him to go now. Zuma faces corruption charges, and his party has picked a successor who is campaigning on an anti-corruption platform. That message has been way too subtle for Zuma who so far seems hell-bent on hanging on despite his country’s failing economy and growing poverty under his leadership.
WHAT IS IN A NAME?
This is one for those who find themselves having the same argument over and over again… Greek police say 140,000 people turned out in Athens on Sunday to protest the Former Yugoslav Republic of Macedonia’s (FYROM) renewed desire to call itself Macedonia. Greeks say its region (called Macedonia) is the true owner of the name. But FYROM says their country is the ancient seat of Macedonia. The dispute has been ongoing since 1991 and leaders say they hope to have it sorted by the end of the year.
SUPER ADS… SORRY, SUPER BOWL WRAP
Trust us – don’t go down this wormhole in case you’re willing to lose some time on this. But there are some fun ads to review. Our favourites:
• Morgan Freeman v Peter Dinklage in a lip sync battle.
• Amazon’s Alexa loses its voice.
Justin Timberlake’s halftime show was a mega-mix of his best of songs. Oh, and the Philadelphia Eagles beat favourites, the New England Patriots, in a thrilling game in case you were interested.
SQUIZ THE DAY
2.30pm (AEDT) - Reserve Bank monetary policy decision announced
ABS Data Releases - International Trade in Goods and Services, December; Retail Trade, December
Waitangi Day - New Zealand
Anniversary of the death of King George VI, father of QEII (1952)
The centenary of British women over 30yo receiving voting rights
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