COLES chief Ian McLeod appeared to give his rivals at Woolworths a backhanded compliment in yesterday's results briefing, acknowledging that "big-box" liquor stores were eating into the sales of smaller stores presumably including his Vintage Cellars and Liquorland operations.
Woolies does not report its results until March 1, but in its half-year sales figures the director of liquor operations, Steve Greentree, was laying claim to having increased market shares in spite of "increased competitor activity" around Christmas coincidentally the month that Coles' McLeod reckoned was his group's best in that category.
Greentree also said that the bulk of the gains for Woolies were in the Dan Murphy's and BWS chains, where it has been opening stores apace. Coles' entry in that sector, 1st Choice, has also been active.
Neither retailer confesses its liquor figures separately from its food numbers. McLeod reckons Coles has experienced a contraction in both sales and profitability, and has detected signs of consumers cutting back on their spending in that area
Australian Bureau of Statistics figures for retail sales of liquor suggest the sales trend is generally higher. The ABS does not measure profitability, but it all suggests Woolies is winning the battle for our livers.
A couple of other highlights that came out of Wesfarmers' online analysts' briefing were the good cop (chief executive Richard Goyder), bad cops (Coles' McLeod and Bunnings' John Gillam and other divisional heads) routines in response to brokers' queries.
When the always entertaining David Errington from Merrill asked where was the earnings bang from all the capital expenditure made over recent years, Goyder said it was an important question and went on to defend gently by explaining that with a lot of the money having gone into freehold property for future stores, it would be a while before the company started earning adequate returns, but "we manage this very closely at a Wesfarmers board level".
Gillam was less diplomatic when JPMorgan's Shaun Cousins tried to turn the subject to Bunnings' fledgling rival', Woolies' Masters stores.
"Perhaps it's timely to reflect on the fact that we are not going to give a running commentary [on competitors]," said Gillam as a warm-up. He then moved on to point out that Australia's total home-improvement market was $40 billion, of which Bunnings claimed only 16 per cent, that its main competitors were the likes of Ikea, bathroom plumbers Reece and even garden shed makers Stratco, and "I struggle to make sense" of analysts that focus on quarterly rates of growth in sales rather than the bigger picture.
When Cousins went on to question performance at Coles, McLeod chimed in by observing that not many retailers were enjoying double-digit profit growth.
"So, perhaps my disappointment is not as great as your own," finished McLeod. To Cousins' credit, he pressed on, politely.
Great Dane raid
LUDOWICI investors now have a $10-a-share offer for stock they could have bought for $3.50 barely three weeks ago or do they?
FLSmidth & Co yesterday afternoon plonked down the Great Danish offer that they had been negotiating with Ludowici since Wednesday, forcing a trading halt.
While the engineering group's Viking raid has the approval of Ludowici, the problem is it is not certain it will be allowed to make the incremental bid.
That is because rival offerer, Scotland's Weir Group, has complained to the Takeovers Panel that FLSmidth has already made public comments indicating its original $7.20-a-share offer was its final offer.
If the panel agrees, that leaves Weir in the box seat with its current $7.92-a-share offering. It will be interesting to see whether it tries to match the new bid, or waits until the panel adjudicating the case makes its decision.
Either way, FLSmidth has had to add a rider to its new offer, pointing out that if the Takeovers Panel call goes the wrong way, it may not be able to give Ludowici shareholders $10 a share. A rejection would also most likely rule out the tax-effective sweetener that Ludowici is contemplating: fully franked dividends of up to 80? a share, the face value of which would come off the $10.
It will be a brave panel that makes that call, but Insider is sure that Clayton Utz's Rod Halstead, who is presiding over the decision, will not be influenced by the thought of Ludowici shareholders carrying pitchforks and torches.
Meanwhile, CBA offshoot Colonial has taken a bob each way on the outcome by selling half its holding in Ludowici (most of it this week after Weir emerged) and reaping an average $7.75 a share.
Fidelity dumps Newcrest
US MANAGED funds goliath Fidelity revealed yesterday that it had tipped more than $250 million worth of Newcrest shares into the market since mid-December.
The reduction of its stake by 8.5 million shares seems to be excellent market timing, for all investors, because even though it started at Newcrest's lowest price in about two years, the shares rose steadily throughout the exercise.
As a result, even though Fidelity started selling at under $US31 a share, by the time its disposals crossed the 1 per cent mark on Valentine's Day (forcing public disclosure), they had risen above $US37.
It still has 61.5 million shares in Newcrest or a $2 billion stake although that is small beer in Fidelity's universe of $US1.5 trillion of funds under management.
Thoughts in the Wii hours
CYNICAL Insider thought that a product designed to make you go "whee!" using your Wii was merely another instance of sexploitation.
Steve DuMosch, whose Mojowijo allows someone on the other end of a Skype conversation to "control" its vibrations is, however, just a romantic, says the PR guff:
"Steve noticed that technology is enabling more and more people to enter into long-distance relationships. He created Mojowijo to allow these people to feel even closer and give them the natural feeling of touch and response even when they are physically apart."
See, making a buck never entered his mind, even though he is now offering affiliate marketing and joint venture opportunities.