Supermarket news

I noticed a couple of interesting news stories in the last few days with relevance to my portfolio. Recently I posted about Morrisons buying a group of smaller retail stores in order to launch a convenience format. Well today they have just announced an entry into the online grocery market too.

Is it too late for them? They are certainly far behind every other supermarket in terms of launching this and the online launch isn’t good news for my holding in Tesco (LSE:TSCO) as it’s one more competitor in that market.

However yesterday there was also some news from Tesco. It has bought the restaurant chain Giraffe for around £50m. Its plan is to launch restaurants near its stores to attract people to the area, and enhance customer experience. This is in a similar vein to their buyout of a coffee chain. Giraffe is, and will continue to be, a family run business. Can’t say that I am particularly excited about the restaurant itself, but I think this is a good move for Tesco and shows their commitment to think ahead of the competition and try new things. I don’t know if the strategy will work but I’m glad they are trying and innovating.

Disclosure: TSCO long, MRW no position

Founder of Investing Sidekick. Works as a research analyst and is an avid value investor, always searching for undervalued shares.

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