Today, we take a look at how grocery sales have been growing during this new year period, how consumers are not in demand of government restricted promotions and how Asda's forecourt business is in an almost £1 billion pound deal. Enjoy!
Asda forecourt business in £750 million deal
The Issa brothers and TDR Capital have revealed that they plan to sell Asda's forecourt business to their own EG Group, as well as certain distribution assets to property investors, to help fund their planned £6.8bn acquisition of the supermarket group from Walmart.EG Group will acquire Asda's 300+ petrol filling stations, car washes and ancillary land for a headline enterprise value of £750 million. The deal is subject to the same CMA regulatory clearance being sought by the Issa's and TDR for their acquisition of Asda. The brothers and TDR Capital also revealed today that the Asda deal will be financed by raising £3.5 billion in debt and a plan to sell certain distribution assets to institutional property investors following CMA and FCA clearance. Asda operates 39 distribution facilities in the UK serving its stores. The sale and leaseback deal will leave the retailer continuing to operate the sites with the prospective owners having no day-to-day impact on the operations.
Consumers not wanting Government restricting food & drink promotions
Following government confirmation back in January that promotions such as multibuys and BOGOFs (buy one get one free's) on food & drink products high in fat, salt or sugar will be restricted from April 2022, a new survey suggests consumers do not welcome the plans. A study by commissioned by the Food and Drink Federation (FDF), found that 73% of in-store shoppers usually or always purchase products that are on promotion when shopping, with a quarter (25%) of respondents suggesting that if there were no promotions, they would be concerned about the affordability of their shopping. Nearly two-thirds of participants (62%) also agreed that promotions are an important way to save money on food and drink, with nearly three-quarters of participants (72%) wanting promotions to continue, finding them useful for saving money, stock up on food for the future, and trying new products.
Grocery sales growth on the up
Latest market share figures from Kantar show take-home grocery sales rose by 12.2% during the 12 weeks up to the 24th of January. This was an acceleration on the Christmas period as the reintroduction of lockdown restrictions and the shutdown of the hospitality sector saw eating out of the home curtailed once more. In January alone, shoppers spent £1 billion more on supermarket food and drink items compared to the same four-week period last year. One year on since the first Covid-19 cases were detected in Britain, Kantar highlighted that clear patterns remain in shopping habits by different age demographics. In the latest four-week period, people under 28, who are typically more open to visiting physical shops, increased spending in larger physical stores by 12%. Over-45s, on the other hand, cut back spend in bigger supermarkets by 1%, and the rapid growth of online shopping, which hit a record share of 14.0% this month, is being led by the oldest demographics.