Sainsbury's/Asda merger

Well, this big story has been rumbling for a few days. It has gone down very well with the Sainsbury's share price. Not surprising really as although this is called a merger it is not at all. Sainsbury's management will take over Asda and in return, Asda's owner, the US retailer Walmart, will get around 42% of Sainsbury's.


Of course, the ignorant Labour rep, Rebecca Long-Bailey claims that this will be bad for customers and workers - parroting the Union line as usual. But wait!


Is she right here, in the stopped clock right twice a day sense? A combined business will have a 30% market share not far off the size of Tesco. The UK will have gone in 15 years from 6 large supermarkets to only three, yes there have been new entrants like Aldi and Lidl (and Amazon), but still a huge drop. As a good capitalist, I am always sympathetic to the view that large corporates will try their best to create oligopolies where possible to the detriment of their customers - it has always been this way.


In contrast, the two companies clearly think they will get this through any Government oversight. They claim that with a lower market share than Tesco and disparate stores which do not compete in local markets (north vs south) it will be fine. Indeed, prices will be lower (of course, this is due to Brexit not the merger, but they don't find room to say that).


Overall though, the UK has a very competitive food market and the big dislocation is online and big-box German style discounters, neither of which factors is addressed by this merger. This is a classic defensive move to try to get some benefits from shared buying and shared IT services - so bad for suppliers and for non-customer facing staff. It won't really help in the long-term with the changes being faced by supermarkets that have huge out-of-town warehouses that don't meet the needs of the internet savvy consumers anymore.


So is this a conspiracy against the supply chain and customers? Probably.


Will this work though? No, too much change in the market caused by the internet for it to be more than a bandage for a few years.

Facebook on trial...perhaps

Sadly our American cousins are afflicted with sae jumped-up hysterical political generation that we have here in the UK.


A classic example of this will be seen today when two congressional hearings will get to grill Mark Zuckerberg of Facebook.


Facebook has apparently a lot to answer for. Sharing cat videos and one-year old's birthday party pics has proven to be a dark road for the world indeed, soon, it started trying to sell you a sofa that you had purchased last year and from then on it was not long before the only thing appearing on Facebook was doing it yourself Sarin kits and guides from Moscow.


Anyway, that is how the congressmen will put it. Asking over the top questions to try and get onto the news and twitter by going gung ho on Zuckerberg. I am a total bystander having never signed up to this over-sharing fantasy world that people enjoy so much. Good luck to them, the idea that you share all your most personal data freely then get annoyed when the company you gave this all to sold the data to make money.


Umm, that is the business model of social media, after all, it is free at the point of use so how are the companies going to make money?


Yet the Congressmen, exactly like our pathetic Select Committees, will grandstand instead of questioning the underlying nature of the business model and how this works. Indeed, Zuckerberg can probably win just by reminding everyone of quite how desperate politicians are to throw money at his company - money raised from their own brand of suckers, and how he will promote some sort of restriction on political advertising. Boy will they not like that.

Phones4U administration - more internet driven destruction?

Who would have thought those nice price comparison websites with their silly adverts and easy to use functionality could destroy so much of the British way of life?

When I say Way of Life, I really mean it. After over 200 years ago now Napoleon tried to insult the British by saying they were a nation of shopkeepers... it has been a long time that the UK has had a huge part of the economy in retail - understandable for such a traditionally strong trading nation.

However, the Internet is the biggest economic and social invention of recent ages, likely that it will become the biggest driver of change in the history of the world, equalling the industrial revolution.

And in many respects, change has come quickly. Only 15 years ago we had the dotcom bubble and plenty of people laughing at the failure of the Internet start-ups. Of course, over time, every single prediction about the net has come true; we all have broadband, most people use it every single day, it accounts for a large and growing amount of expenditure, it has gone mobile. The predictions seem to be about 5 years wrong every time in terms of practicality, but they come true in the end.

Now with Phones4U, a retail option of offering multiple service providers is gone. Instead the remaining networks will either sell themselves or over the Internet. Hundreds of shops and employees are going. Carphone Warehouse merged with Dixons, so their own shops are going the same way.

Phone shops have been ubiquitous on UK High streets for 20 years and their small spaces are not ideal for other venues so they will prove hard units to fill.

My thoughts are what is next for the Internet monster:

1. Banks
2. Estate Agents
3. Job Agencies
4. Supermarkets
5. White Goods stores

I am unsure as to what remains in the very long-term apart from charity shops, coffee shops, bars and restaurants with a smattering of clothes shops.

Google is 10: is Chrome the killer App?

Google host our blog for free and provide the best analytics as well as advertising. I have a lot of admiration for a company that can be so consumer friendly. In fact with customer service and innovation so high on the companies agenda it does not surprise me that this company is 10 years old and yet valued at $140 billion.

To makr its 10th and also to try and out-compete Microsoft Google has launched its new Browser, Chrome. I am not much of a techie but could see little in it for the end user over say Mozilla. What is the master stroke is making the product open-source, the opposite of Microsoft; this enables other companies to benefit from Google's work and then customise and develop the application. Google wins because it is more customer friendly. people tend to use Microsoft because they have to for browsing.

With the continuing focus on innovation and pleasing corporate and personal users, Google is stuck with a winning strategy. It is an excellent business case example, focus on customers happiness and innovation then everything else will fall into place. Happy Birthday Google.