Tesco has issued a statement this morning announcing it will enter a long term strategic alliance with Carrefour, the French supermarket group. Championing the idea that this will enable both companies to improve the ‘quality and choice of products’ available to their customers at ‘even lower prices’, the note adds that supplier relationships will be ‘strengthened’ by the move. With many suppliers already struggling with margin erosion, it’s difficult not to see moves like this storing up problems in the longer term.
Meggitt, the component manufacturer for aerospace and defence systems, has today announced that it is upgrading revenue guidance for the year. This follows better than expected trading during the second quarter, meaning that full year revenue growth is now tipped to be in the region of 4% to 6%, up from the 2% to 4% the company had previously forecast. The statement did come with a rider that operating margins may be at the lower end of expectations, but even so that’s 17.7%-18%.
Breedon Group, the operator of a series of aggregate mines across the UK, has today announced that it has completed an asset swap with its larger peer Tarmac. This process has been ongoing for some months following the intervention of the competition regulator, but the remedies have been accepted and Breedon sees the outcome as a margin enhancing deal. Instead of having to buy in materials from competitors, it now owns the supply.