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I enjoy VICE. I’m particularly impressed by how they have managed to stay relevant as they’ve grown into a >$1bn company with backing from the likes of Rupert Murdoch. I guess the young employee base helps here, though I wonder what they do as their core cohorts start to age…do you think they’ll have to “alienate” their early customers in order to win the next generation?

On December 14, 2015, NHJG commented on B&M: The Secret Source in European Value Retailing :

I’m also a huge fan of this business. Simon Arora’s story is pretty incredible – I think it’s interesting how he moved from sourcing downstream to retail when he saw the size of the opportunity and the gouging of customers across various competitor retail formats. Really like the relentless focus on low prices – there is a ‘war room’ in the HQ with the price differentials on key items: there are 50-60% gaps on branded goods…but the great joy of the model is that B&M aren’t big enough to motivate competitors to close these gaps…

On December 9, 2015, NHJG commented on Ocado’s ‘Sci-Fi Ballet’ :

Hey – thanks for the comment. My understanding is that Amazon have struggled with Fresh – this complexity of warehousing and delivery is not their core competency. On the warehousing side, the negative press about their warehouse conditions for employees is in stark contrast to the high degree of automation at Ocado. Amazon don’t have conveyors and robots, just loads of very unhappy minimum wage employees who get fired if they don’t cover enough miles in a day. On the routing side, Ocado has a neat hub and spoke system and proprietary routing algorithms, which enable it to obtain the order density necessary to spread the cost of delivery across users – again an area where competitors who are accustomed to 3P/decentralised delivery (Amazon, Instacart) have a disadvantage.

On the supermarket label products, I’m not sure that’s right – I think own-brand is viewed less favourably than branded product. But Ocado can be agnostic about this – it can either continue developing higher margin own branded products to sell directly, or it can pursue more partnerships with UK (and international) partnerships to license its IP and work along the lines of a ‘Whole Foods Online, powered by Ocado’ model. The margins are fine either way.

I do think the head-start Ocado has got is pretty formidable; however, they have been helped in the UK by an incumbent oligopoly that has been price-gouging consumers. There’s now a price war, driven by brick and mortar discount retailers who have entered the market from Germany. So it will be interesting to see the company’s response to this tougher climate. However, they remain the foremost online-only operator in the world’s densest e-commerce market: I’m comfortable in the longer term they will continue to be the primary beneficiary of changing consumer habits.