Companies That You Expect to Disappear Soon

[cactustwirly]

The Restaurant Group, which owns Wagamama and Frankie & Benny’s, announced well before Coronavirus that it was going to close ninety sites overall. That was just under a third of all of them.

It’s true that, at that stage, the axe was to fall hardest on the likes of F&Bs in their portfolio.

However, they have since announced that they are reviewing all the remaining sites again, and have already closed two Wagamamas in London that weren’t on the original list.

It really doesn’t matter how subjectively popular they are; it’s the business model that’s shot to pieces, and Wagamama will be (at least in the short term) particularly badly affected by the fact that such a lot of their branches are in covered shopping centres, which are struggling most with footfall at the moment.

The vast majority of those are F&B which is dreadful, and always empty
I don't see how the business model is shot, it's more likely to be sloppy management and bad quality food.

 

[SteveM70]

I don't see how the business model is shot

In normal circumstances I’d agree, but argue the business practices of the owners, loading the business with unsustainable debt, can drag a business that turns an operating profit under. I read a while ago that the debt of Pizza Express averages out at well over a million per site. It’s mad.

But in current circumstances, of lockdown followed by consumer lack of confidence, likely to be followed by a recession where discretionary spend is always the first thing to go, the future looks pretty bleak.

And of course closing branches generally increases the central costs each remaining branch has to bear, and also tends to make stuff like logistics less efficient too

 

[Mcr Warrior]

Presumably the debt loading is because the resulting interest cost of the debt then offsets the trading profit generated and reduces the overall corporation tax payable.

If so, that surely only works if there are any profits actually being generated from trading.

 

[pdq]

I don't go to a supermarket for a butchers...

Plus the stores are disgusting, in dire need of refurbishment

My town doesn't have a butcher, a fishmonger, a delicatessen or a green grocer! All gone because of Tesco, which now can't be bothered to provide them either. All run of the mill store brands have good and bad stores: some just refurbed and others really needing it.

 

[Bletchleyite]

The vast majority of those are F&B which is dreadful, and always empty
I don't see how the business model is shot, it's more likely to be sloppy management and bad quality food.

To some extent the business model is rubbish food at excessive prices served by minimum wage staff who by and large don't care.

That business model deserves to die. I'd far rather see more family owned restaurants that care about their product and service spring up in their place.

The concept of chains is dying, and TBH as long as we can replace the employment I see that as a good thing. It's only a short part of history anyway; we were once a nation of individual shopkeepers, and it feels like we might be again.

My town doesn't have a butcher, a fishmonger, a delicatessen or a green grocer! All gone because of Tesco, which now can't be bothered to provide them either. All run of the mill store brands have good and bad stores: some just refurbed and others really needing it.

To correct you there, it's not "because of Tesco", it's "because people chose to stop shopping there in favour of Tesco". If they had continued to shop at those stores and just gone to Tesco for their tins and packets, they would have survived. It's to some extent also the fault of those businesses for, as most do, sticking resolutely with Monday-Saturday 9-5pm, often closing for lunch, so people who were at work couldn't go there, though that may well revert to being viable with more home working, as who cares if you pop into town at 3pm between meetings provided the work is done?

 

[pdq]

To correct you there, it's not "because of Tesco", it's "because people chose to stop shopping there in favour of Tesco". If they had continued to shop at those stores and just gone to Tesco for their tins and packets, they would have survived. It's to some extent also the fault of those businesses for, as most do, sticking resolutely with Monday-Saturday 9-5pm, often closing for lunch, so people who were at work couldn't go there, though that may well revert to being viable with more home working, as who cares if you pop into town at 3pm between meetings provided the work is done?

Good point. It happened before I moved to the area, but you're right that too many older businesses probably didn't respond to the threat/opportunity that the supermarket brought. They probably couldn't compete on price either though.

I fear this discussion is taking the thread off topic...

 

[cactustwirly]

My town doesn't have a butcher, a fishmonger, a delicatessen or a green grocer! All gone because of Tesco, which now can't be bothered to provide them either. All run of the mill store brands have good and bad stores: some just refurbed and others really needing it.

They don't need to provide them, when they have pre packed meats, and a vegetable aisle.

 

[FQTV]

The vast majority of those are F&B which is dreadful, and always empty
I don't see how the business model is shot, it's more likely to be sloppy management and bad quality food.

I’d be interested to consider any evidence for these assertions, given that the industry itself is hoisting white flags across the board, and reporting likewise to its investors and shareholders.

 

[xotGD]

2,500 more job losses at Debenhams. In addition to 4,000 already announced.

However, no more store closures just now.

 

[SteveM70]

2,500 more job losses at Debenhams. In addition to 4,000 already announced.

However, no more store closures just now.

Blimey. Are they going self-service?

 

[DavidGrain]

Blimey. Are they going self-service?

Department stores are effectively self-service anyway with open shelves and racks and central pay points

 

[DB]

To correct you there, it's not "because of Tesco", it's "because people chose to stop shopping there in favour of Tesco". If they had continued to shop at those stores and just gone to Tesco for their tins and packets, they would have survived. It's to some extent also the fault of those businesses for, as most do, sticking resolutely with Monday-Saturday 9-5pm, often closing for lunch, so people who were at work couldn't go there, though that may well revert to being viable with more home working, as who cares if you pop into town at 3pm between meetings provided the work is done?

You seem to be claiming that it's a level playing field - which it's very definitely not! The supermarkets have marketing budgets, they have psychologists to devise schemes to get people to buy from them. They can use loss-leader offers to draw people in. They can open pretty much whatever hours they decide, which small local shops simply can't as they couldn't afford the staff to do so. Claiming that it's all down to people choosing to shop there misses the point - if even a proportion end up shopping at the supermarkets for whatever reason, it can tip local shops into being unviable.

 

[Dai Corner]

You seem to be claiming that it's a level playing field - which it's very definitely not! The supermarkets have marketing budgets, they have psychologists to devise schemes to get people to buy from them. They can use loss-leader offers to draw people in. They can open pretty much whatever hours they decide, which small local shops simply can't as they couldn't afford the staff to do so. Claiming that it's all down to people choosing to shop there misses the point - if even a proportion end up shopping at the supermarkets for whatever reason, it can tip local shops into being unviable.

The large chains started with one or two shops. They have hundreds now because they offered customers what they wanted.

 

[DB]

The large chains started with one or two shops. They have hundreds now because they offered customers what they wanted.

But they have now reached such a monopoly that the space for new entrants is largely non-existent.

Plus most independent shopkeepers do not have ambitions to create a national chain.

 

[John Griffiths]

There are still plenty of small shops. Here in Newcastle I see them in wealthy suburbs and in very non-wealthy suburbs. They find niches - convenience, speciality ( south Asian, Turkish, E European, etc) posh 'artisan-ness', or whatever. They may not be growing fast, but they are there.

 

[Dai Corner]

But they have now reached such a monopoly that the space for new entrants is largely non-existent.

Plus most independent shopkeepers do not have ambitions to create a national chain.

Though the Germans entered the British market dominated by the 'big four' and now have a 14% share.

 

[John Griffiths]

How much further, though? I reckon 20% between them and then the situation will stabilise. They clamber upmarket, the big 4 secure the middle ground, Waitrose and M&S scrap for the posh (and how long before one or other buy up Booths?)

 

[DB]

Though the Germans entered the British market dominated by the 'big four' and now have a 14% share.

True, but they were already well established in their home country and had all the business infrastructure in place.

 

[Dai Corner]

How much further, though? I reckon 20% between them and then the situation will stabilise. They clamber upmarket, the big 4 secure the middle ground, Waitrose and M&S scrap for the posh (and how long before one or other buy up Booths?)

A lot might depend on what the Americans (are allowed) to do with Asda.

 

[John Griffiths]

Well, any substantial merger seems off the cards, unless substantial donations to one of our major political parties are made, so it would seem likely that Asda is sold to a private investment group, maybe Chinese.

 

[dgl]

As has been said some of the issues with chain restaurants is they don't offer good value for money compared with independent local restaurants, why would I go to the likes of Carluccios, Zizzi, Pizza Express, Jamies Italian or Prezzo when I can go to a fantastic proper Italian restaurant in Weymouth? ~£12 for pasta and have a great lunchtime deal.

As for supermarkets I find Waitrose/M&S/Co-Op to easily be the most expensive (although co-op don't have many big stores now, the only local ones being Dorchester (that is being downsized) and Bridport (which surprises me given there is a Lidl next door, plus Waitrose and Morrisons just down the road), the next most expensive being Sainsburys, Tesco and Morrisons I feel are about the same pricewise but in terms of fresh fruit, veg, meat and fish Morrisons is the clear leader, actually being adamant that they want to keep the counters open, and they do a pick your own salad as part of the meal deal.
The Morrisons Cafe's are also the best of the lot, cheap and excellent quality for the price. Plus they use proper Heinz beans, and all the sauce sachets are Heinz too!
As for ASDA, they may be cheap in some respects but you mostly get what you pay for, except for the food to go ranges where the lack of a meal deal means you get nowhere near the amount for your money. Their regular cafes are also dreadful. It will be interesting to see what happens to ASDA as will anyone want to buy into a business that isn't as healthy as its rivals, would buying a stake of one of the other be a better option even if it cost more?

As for Aldi/Lidl, they sell some really quite good stuff and the middle isles can get you some real good deals, I mainly shop at Lidl as I can walk to the one on the Island in ~15mins rather than either a bus into Weymouth for Aldi/Asda/Morrisons/M&S/Sainsburys, Dorchester for Waitrose or a bus/steep walk to Tesco in Easton.

 

[Mcr Warrior]

As for supermarkets I find Waitrose/M&S/Co-Op to easily be the most expensive (although co-op don't have many big stores now, the only local ones being Dorchester (that is being downsized) and Bridport (which surprises me given there is a Lidl next door, plus Waitrose and Morrisons just down the road), the next most expensive being Sainsburys, Tesco and Morrisons I feel are about the same pricewise but in terms of fresh fruit, veg, meat and fish Morrisons is the clear leader, actually being adamant that they want to keep the counters open, and they do a pick your own salad as part of the meal deal.
The Morrisons Cafe's are also the best of the lot, cheap and excellent quality for the price. Plus they use proper Heinz beans, and all the sauce sachets are Heinz too!
As for ASDA, they may be cheap in some respects but you mostly get what you pay for, except for the food to go ranges where the lack of a meal deal means you get nowhere near the amount for your money. Their regular cafes are also dreadful. It will be interesting to see what happens to ASDA as will anyone want to buy into a business that isn't as healthy as its rivals, would buying a stake of one of the other be a better option even if it cost more?

As for Aldi/Lidl, they sell some really quite good stuff and the middle isles can get you some real good deals, I mainly shop at Lidl as I can walk to the one on the Island in ~15mins rather than either a bus into Weymouth for Aldi/Asda/Morrisons/M&S/Sainsburys, Dorchester for Waitrose or a bus/steep walk to Tesco in Easton.

Interesting stuff. Which of these companies do you expect to disappear soon?

 

[Peter Sarf]

I have been wondering about Sainsburys for a long time so maybe it will not survive Covid-19. I was brought up on them but went off them when they moved out of town so were the same effort to get to as the others. When I do go to Sainsburys I notice too many empty shelves where there would be stuff I expected to get (pre Covid-19). I usually leave Frustrated and having to shop elsewhere. I have now lost the knowledge of where things are located so more of an ordeal. We now have a Morrisons very near which is corner shop distance and very good. For me I pop into Lidl as, although small, it has everything I need and easy to navigate.

So I think Saisburys could be at risk. The signs were there before Covid-19 from my experience.
ASDA always struck me bland with nothing special price wise to recommend it. Maybe irrelevant to the punters.
Tescos, well the penny dropped a few years ago. Buy one get one free on stuff that is cheaper elsewhere. Again maybe irrelevant to the punters.

 

[Bald Rick]

I have been wondering about Sainsburys for a long time so maybe it will not survive Covid-19. I was brought up on them but went off them when they moved out of town so were the same effort to get to as the others. When I do go to Sainsburys I notice too many empty shelves where there would be stuff I expected to get (pre Covid-19). I usually leave Frustrated and having to shop elsewhere. I have now lost the knowledge of where things are located so more of an ordeal. We now have a Morrisons very near which is corner shop distance and very good. For me I pop into Lidl as, although small, it has everything I need and easy to navigate.

So I think Saisburys could be at risk. The signs were there before Covid-19 from my experience.
ASDA always struck me bland with nothing special price wise to recommend it. Maybe irrelevant to the punters.
Tescos, well the penny dropped a few years ago. Buy one get one free on stuff that is cheaper elsewhere. Again maybe irrelevant to the punters.

Sainsbury’s are fine; they won’t be going anywhere.

 

[dgl]

Sainsbury’s are fine; they won’t be going anywhere.

Agreed, like Tesco buying Booker, Sainsbury's buying Argos helped them expand easily in the non-food market gaining them extra customers, combine that with Argos customers who now only have an in-store Argos and such might then do a bit of food shopping while they are there.

Asda's future does look bleak though, they have no USP like M&S, Waitrose (supposed extra quality) and Morrisons (counters, Café) or the extra business that Sainsbury's and Tesco have. Plus with a high saturation of supermarkets in a lot of areas (The Weymouth/Portland/Dorchester area has 15 supermarkets (not including metros, locals and expresses) in about a 10mi radius (2x Iceland, Waitrose, Aldi and Tesco, 3x Lidl's, 1x Sainsburys, Morrisons, ASDA and M&S (with Morrisons, Lidl, Aldi and Sainsburys in Weymouth within ~1mi of each other!)) some can't be sustainable in the long run.

 

[John Griffiths]

It has a significant weight in the north of England. Not so much competition where I live.

 

[DavidGrain]

Remember Netto. A cheap supermarket chain but they pulled out of the UK market some years ago. Sainsbury's brought them back under a licence to use the name but that was not successful.

I was surprised to find that there are two Aldi chains. I think we have Aldi North here in the UK. I have read that in one German town the two Aldi's face each other across the street.

 

[Darandio]

Remember Netto. A cheap supermarket chain but they pulled out of the UK market some years ago. Sainsbury's brought them back under a licence to use the name but that was not successful.

Not quite pulled out, Asda bought Netto UK to increase their network of smaller stores. Our Asda is ex-Netto.

 

[SteveM70]

Remember Netto. A cheap supermarket chain but they pulled out of the UK market some years ago

Sold to Asda for just £800m so a nice way to “pull out of the UK”

 

[John Griffiths]

Tesco 's launch of its own discount chain 'Jack's' hasn't exactly set the retail world ablaze. Has anyone here shopped in one?