".....The brutal reality for Coles is it has an earnings before interest and tax (EBIT) to sales margin of 4.1 per cent, compared to more than 7 per cent for Woolworths. With Woolworths now responding to Coles' price attack on certain products, it is starting to get ugly. Woolworths can afford it; Coles, less so.
This may not be an issue for the current management of Coles, many of whom came from Britain on short-term bonus incentives and who won't be around for the longer term havoc they have wreaked on the dairy, eggs or other industries. Coles' supermarket boss Ian McLeod stands to reap a bonus of around $38 million if he hits target through to 2013."..
"Retailer up for the challenge" - Article in the Weekend Business section of the Sydney Morning Herald by Greg Hoffman from "The Itelligent Investor".
http://www.smh.com.au/business/retailer-up-for-the-challenge-20110401-1crji.html
No mention as to whether he holds Woolworths shares or what price target he puts on Woolworths but a fairly balanced article none the less, supporting the article by Adele Ferguson earlier in the week.
That is what margin of safety are for
you buy at a discount to its intrinsic value and with that you some what covered on the down side
You drive 5 tons truck over 10 tons load bridge just in case a naughty package loader put on an extra ton or two and you still make it over safely
In fact they use factors of safety, where they mark the maximum load to a fraction of the actually failure load. The bridge could probably take 120 tons for all one knows.I always drove across the bridge with 12 tons load on the basis that the sign had a built in safety margin. That is the bridge is really rated to 15 tons but they don't wont truckies driving across with 18 tonnes so the sign post it as a 10 ton load bearing bridge.
Not sure on the connection to Woolworths or my earlier post though?
In fact they use factors of safety, where they mark the maximum load to a fraction of the actually failure load. The bridge could probably take 120 tons for all one knows.
Question to WOW people, if commodity prices continue to rise, am I to assume that this will not actually hurt WOW margins, given that food is not really something people will cut down on?
Question to WOW people, if commodity prices continue to rise, am I to assume that this will not actually hurt WOW margins, given that food is not really something people will cut down on?
I don't hold WOW at present but am always impressed by their succession planning.Michael Luscombe out - a former shelf packer in.
I think it was widely known Luscombe would be stepping down - how do holders feel about it coming to fruition?
I don't hold WOW at present but am always impressed by their succession planning.
As you say, Mr Luscombe's departure has been well forecast, so has been imo built into the SP. I can't see any particular logic in the SP falling slightly today while WES rose.
In a week it will be meaningless.
WOW has an excellent history of choosing the right CEO's.
Just my opinion, but I think when this current price war on milk, bread etc, has all died down (and it will), Coles will not have won any long term converts, given the Australian public's desire to see farmers get a fair go.
If there's a backlash against Coles, it's no more than they deserve.
I think not. Woolworths has deeper pockets and can outlast Coles in a spending stand off.u r right, but it looks like wow is going to lose the discounting war with coles
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