In MOBILE PHONE-RELATED NEWS, the Apple hype gathers steam ahead of its developer conference next week and Samsung's Gal
This is my summary of The Times, The Telegraph, The Guardian, The Financial Times and The Wall Street Journal (amongst other sources). NONE of this note is meant to constitute investment advice and any opinions given are my own. Also, this document is in no way intended to be a substitute for purchasing individual issues or subscriptions for the publications used. Quite the contrary – I hope that reading the Watson’s WIFI will heighten and enhance your interest in them!
Friday, 22nd September 2017
In MACROECONOMIC NEWS TODAY, China’s credit rating gets downgraded. In RETAILER NEWS, Amazon moves its Whole Foods acquisition closer to being a conventional supermarket and Aldi outlines how it’s going to conquer America. In CONSUMER NEWS, Deliveroo sees a surge in revenues whilst the owner of All Bar One feels pressure on its margins. In ELECTRIC CAR-RELATED NEWS, MercedesBenz announces a $1bn investment in the US to make electric cars and Johnson Matthey looks to take a slice of future battery action. IN OTHER NEWS, I bring you a McDonald’s hack for McFlurries, a tent you can pitch indoors to isolate yourself (!) and an idea for an unusual (and probably exhausting) mini-break. For more details, read on… This document is designed to be read in about 10 minutes, but if you are pushed for time just read the bits in bold to get the general idea. If you do this it will take about 1 minute and if you include the “SO WHAT?” sections it’ll take about 5 minutes.
SO CHINA’S RATING GETS A KNOCK… “China’s credit rating lowered over debt fears” (The Guardian, Richard Partington) highlights Standard & Poor’s downgrading of the country’s credit rating on concerns over rising debts as total debt has quadrupled since the financial crisis started to hit the $28trn level at the end of last year. The rating was lowered from A+ to AA- (so it’s now on a par
with the US and Austria), so it’s not that bad, but China won’t like it as its debt will now cost more to service as a result. * SO WHAT? * I’d
say that China’s burgeoning debt problem is a work in progress as the regime has been busy clamping down on corruption and stemming the flow of capital overseas amongst other things and if any country can get back on track, China can because of its centralised control over the economy. The Chinese credit boom is a danger that
has been acknowledged by the government and this will probably give them an extra little incentive to solve the problem before it gets any worse. I suspect that other ratings agencies will shortly jump on the downgrade bandwagon – S&P just got there first and grabbed the headlines.
IN RETAILERS NEWS, AMAZON GETS BUSY WITH WHOLE FOODS AND ALDI DRAWS THE
I apologise in advance for any spelling, punctuation or grammatical errors in this document. I HATE making mistakes, but then again I am a one-man-band with no proof-reader and I work to a very tight deadline. Thank you for your understanding! In case you were wondering, I was a stockbroker for 13 years at four different investment banks covering European and Japanese institutional client bases that included some of the world’s biggest pension and hedge funds. I am now a headhunter and founded my own business helping candidates getting the jobs they really want focusing on the City. This newsletter forms part of the resources available on www.seihaconsulting.com but can also be accessed via www.watsonswifi.com . You can also see me on www.tiptv.co.uk every other Friday doing a review of the week.
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This is my summary of The Times, The Telegraph, The Guardian, The Financial Times, The Wall Street Journal and The Nikkei (amongst other news sources). It’s been designed to be read in about 10 minutes, but if you are really strapped for time, then just cast your eyes over the bits in bold. This should reduce reading time to about 2 minutes for the whole thing. Obviously, if anything catches your eye you can dip in. I hope you enjoy reading this!
AMERICAN BATTLE LINES… “Amazon puts Whole Foods on fast track to conventional supermarket” (Wall Street Journal, Heather Haddon and Annie Gasparo) takes a look at what Amazon is doing with its recent acquisition as it has announced plans to change the way companies can sell and market their products to Whole Foods starting from next April. Currently, brand representatives take a very hands-on approach to how they promote and monitor their products in Whole Foods, but this will be done away with from next April as executives at its Austin, Texas HQ will start to take more control over inventory. Moves towards this more centralised approach were already afoot before Amazon bought the company in August this year but the acquisition has served to give more pep to the proceedings. * SO WHAT? * Amazon intends
to boost sales at the struggling grocer - so standardising operations and prices is all part of the process. Whole Foods has been unique amongst large retailers in the US for allowing in-store brand representatives for various specialist products such as
certain health foods (chiasoaked seeds, anyone?) and health and beauty items so no doubt a number of quirky products will fall out of the mix with the advent of more centralisation. While this may detract from the homespun feel of the stores, it will save money and give a more consistent view of the brand overall. “How grocery giant Aldi plans to conquer America: limit choice” (Wall Street Journal, Zeke Turner) takes a look at how Aldi plans to take on the competition in America – give customers way less choice than other retailers (interesting fact: did you know that “Aldi” is a contraction of “Albrecht” – the surname of co-founder brothers Karl and Theo – and “discount”? Well now you do!). Although this sounds a bit mad, this very approach has helped it to grow into one of the biggest retail groups in the world with over 10,000 locations, businesses in 18 countries and annual revenues in the region of $80bn. The idea behind this approach is that you offer a minimalist product selection to the punter which helps the company to cut costs to the bone plus it has the added benefits of resulting in faster turnover, smaller stores,
less rent, lower energy costs and fewer staff to stock the shelves. I’d recommend reading this article as it goes into the history of the company which is absolutely fascinating! * SO WHAT? *
You will recall that the company very recently announced a $3.4bn investment in increasing its US presence and aims to increase it by almost 50% (to have 2.500 stores in total) by the end of 2022 which would make it the #3 grocer in the US after WalMart and Kroger. It is clearly taking this move seriously as becoming a player in one of the largest and most competitive grocery markets in the world will be no mean feat as recent moves by Amazon on Whole Foods and Goole partnering up with Wal-Mart pile on even more pressure. Time will tell who the real winners will be!
IN CONSUMERRELATED NEWS, DELIVEROO SERVES UP GROWTH BUT ALLBAR-ONE OWNER REMAINS DOWNBEAT ON MARGINS… “Deliveroo app serves up 600pc surge in annual revenue” (Daily Telegraph, James Titcomb) highlights Deliveroo’s huge revenue growth number on the one
I apologise in advance for any spelling, punctuation or grammatical errors in this document. I HATE making mistakes, but then again I am a one-man-band with no proof-reader. Thank you for your understanding! This newsletter forms part of the resources available on www.seihaconsulting.com but can also be accessed via www.watsonswifi.com . Any opinions expressed are purely my own…
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This is my summary of The Times, The Telegraph, The Guardian, The Financial Times, The Wall Street Journal and The Nikkei (amongst other news sources). It’s been designed to be read in about 10 minutes, but if you are really strapped for time, then just cast your eyes over the bits in bold. This should reduce reading time to about 2 minutes for the whole thing. Obviously, if anything catches your eye you can dip in. I hope you enjoy reading this!
hand, but then losses ballooned from £30.1m to £129.1m during 2016 on the other. Although the company saw sales shooting up from £18.1m to £128.6m in 2016, wafer thin margins, admin expenses (new staff and a London office) and overseas expansion have all taken their toll. * SO WHAT? * It’s
great that a home-grown company can grow so quickly (it was only founded in 2013!), but its rate of cash burn whilst expanding operations to 12 countries and 120 cities is phenomenal even by other tech start-up standards. It seems that founder Will Shu is going for sh!t or bust. IHMO, the key to the company’s future survival lies in picking the right time to focus on profits whilst at the same time building enough scale to fend off any competition. Tricky. In “All Bar One owner warns of squeezed profit margins” (Daily Telegraph, Bradley Gerrard) we see that shares in pub group Mitchells & Butler fell by almost 6% in trading yesterday as the owner of All Bar One and Nicholson’s stated that profit margins were being hit in “challenging” trading. * SO WHAT? * I thought this was
worthy of mention as a lot of
recent spending surveys have shown that consumers are still spending money on “going out”, with pubs being part of that. However, this downbeat assessment of trading would suggest that the momentum is slowing and it sounded like the chief exec of M&B, Phil Urban, was preparing the ground for further disappointment and job losses. This certainly backs up the Moody’s report I mentioned in Monday’s WIFI which concluded that the UK’s pub industry is facing a perfect storm.
generation of vehicles. The US plant will make SUVs for the company’s EQ brand and is expected to create over 600 jobs in Alabama, in addition to the 3,700 who produced 310,000 vehicles last year. Construction on the new plant is expected to start in 2018 with it going operational in 2020. * SO WHAT? * This is definitely a
IN ELECTRIC CARRELATED NEWS, MERC ANNOUNCES NEW INVESTMENT IN US PRODUCTION AND JOHNSON MATTHEY ANNOUNCES ITS INTENTION TO JUMP ON THE EV FUN BUS…
“Battery business plugs into electric car market” (The Times, Robin Pagnamenta) heralds the announcement by speciality chemicals company Johnson Matthey that it will spend £200m on expanding its battery material business in response to the boom in the global electric vehicle market. The money will be used to build a factory somewhere in Asia (probably China) to meet Chinese demand as well as strengthening its battery research operation in the UK. Its current battery material business makes powdered lithium iron phosphate and nickelate materials which are used to make batteries used in all sorts of things like hybrid
“Mercedes-Benz invests $1bn to make electric cars in US” (Financial Times, Patrick McGee) shows how Merc parent Daimler has announced plans to invest $1bn on producing electric cars in the US for the first time ever as it tries to turn the screws on its rivals by establishing manufacturing bases across three continents (Europe, China and the US) to build the new
strong statement of intent and not an inconsiderable amount of money. Let’s hope power generation and the charging infrastructure will keep up with demand for electric vehicles.
I apologise in advance for any spelling, punctuation or grammatical errors in this document. I HATE making mistakes, but then again I am a one-man-band with no proof-reader. Thank you for your understanding! This newsletter forms part of the resources available on www.seihaconsulting.com but can also be accessed via www.watsonswifi.com . Any opinions expressed are purely my own…
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This is my summary of The Times, The Telegraph, The Guardian, The Financial Times, The Wall Street Journal and The Nikkei (amongst other news sources). It’s been designed to be read in about 10 minutes, but if you are really strapped for time, then just cast your eyes over the bits in bold. This should reduce reading time to about 2 minutes for the whole thing. Obviously, if anything catches your eye you can dip in. I hope you enjoy reading this!
and electric vehicles, ebikes, laptop computers and smartphones etc. * SO WHAT? * The company
share price rose by 15% on the announcement. This is a very hot area, so such a move is hardly surprising!
http://tinyurl.com/y973ox8s). NO THANKS!!! As always, thank you for reading the WIFI!
…AND FINALLY, IN OTHER NEWS… Do you like McFlurries but despair at the paucity of toppings? Well here’s something you might be able to do to improve the situation: “McDonald’s fans reveal little-known and cheap tip to get extra McFlurry toppings” (The Mirror http://tinyurl.com/ycn2mye5) . Fancy a bit more “me time” but don’t want to go outdoors? Step forward: “Japan’s ‘All-Alone Tent’ lets you cheaply, easily set up a secret computer room inside your home” (SoraNews24 http://tinyurl.com/yasoqjnd). Pretty pointless and rather anti-social if you ask me! AND FINALLY, how about this for an unusual “minibreak” idea? Have a look at “This is said to be the most haunted prison in the UK – and you can stay the night if you dare” (The Mirror I apologise in advance for any spelling, punctuation or grammatical errors in this document. I HATE making mistakes, but then again I am a one-man-band with no proof-reader. Thank you for your understanding! This newsletter forms part of the resources available on www.seihaconsulting.com but can also be accessed via www.watsonswifi.com . Any opinions expressed are purely my own…
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