The UK’s second biggest supermarket Asda is reportedly scaling back on its Black Friday discounts for 2015 after chaotic scenes last year. In 2014 bargain hungry shoppers were seen fighting as they battled to get their hands on heavily discounted items such as televisions, whilst the big discounts and extra staffing costs meant gains for the retailer were not as big as had been hoped.

Black Friday frenzy has gripped the UK in recent years as retailers have aimed to replicate the huge commercial success of the post Thanksgiving weekend in the US. Indeed it has become known as the biggest shopping day of the year due to the massive flash discounts offered on many high price items in the run up to Christmas.

Asda are owned by the US retail giant Walmart and have previously taken a full on approach to Black Friday but last year saw disappointing sales from the day of discounts, with little or no boost to their grocery sales produced by dropping prices on toys and electronics.

In a report published by trade journal Retail Week and picked up by the Guardian newspaper it is claimed that Asda will consider an online-only approach to discounting goods or will spread deals out over a period of several days in an attempt to avoid stampedes in stores.

Last year Asda is believed to have registered two million sales between 8am and mid-afternoon on Black Friday, giving them their busiest single trading day of the year to that point. However, a source quoted by the Guardian commented, “Last year big-ticket items sold at a loss and attempts to ensure safety by forcing shoppers to queue for items meant food sales tanked.”

This year many businesses are focusing their Black Friday strategy on online sales, yet this too requires careful planning and has the potential to backfire. In 2014 the online shops of a number of large retailers including Currys and Marks & Spencer struggled with demand.

Meanwhile in the run up to Black Friday retailers are unclear on what the day could bring, even if massive numbers of transactions are expected. Argos have issued a profit warning after investing heavily on advertising and logistics whilst being unsure of the level of sales activity to expect.

In addition John Lewis predict 2015 Black Friday sales will increase 20% on last year’s figures, but also believe that the heavy demand for special offers can later disrupt consumer spending and profitability in the run up to Christmas.

Figures from Experian-IMRG for 2014 showed that the total five-week period of Christmas shopping in the UK saw £4bn spent, with £810m of that on Black Friday, £720m on Cyber Monday and £702m on Boxing Day. For 2015 those figures are expected to rise to £1.07bn on Black Friday, £943m on Cyber Monday and £856m on Boxing Day, meaning a colossal overall spend of £4.9bn over the total five-week period.

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Macduff Shellfish Group (“Macduff”), one of Europe’s leading wild caught shellfish processors, has entered into an agreement for 100% of the assets of Macduff to be acquired by Canadian-based Clearwater Seafoods (“Clearwater”) for £98.4m from the Beaton family and Change Capital Partners, the specialist pan-European private equity fund.

Based in Mintlaw, near Peterhead in Scotland, Macduff has factories in Mintlaw, Stornoway and Exeter and owns and operates 14 mid-shore scallop harvesting vessels from its Dumfries facility.  It employs approximately 400 people at the seasonal peak, specialising in scallops, langoustine, whelk and crab.

Nova Scotia-based Clearwater is one of North America’s largest vertically integrated seafood companies, employing approximately 1,400 people, delivering premium wild seafood including scallops, lobster, clams, coldwater shrimp, crab and groundfish.

The deal brings Macduff access to new markets, investment and opportunities for growth.  For Clearwater, the acquisition of Macduff provides access to market leading supply in key markets and channels along with a well-established brand, UK-based harvesting and processing expertise, a strong management team and a talented workforce.

Under the deal Macduff will retain its name and operate as a wholly-owned subsidiary of Clearwater, sharing resources and best practice between the businesses. Current Chairman Euan Beaton will become President of Macduff and Managing Director Roy Cunningham, will assume the role of Vice President.

Euan Beaton, Chairman of Macduff Shellfish, said: “Having reached our goal of building a £52m business, we had one suitor in mind which shares our vision and values to enable us to accelerate our growth on a global scale.  With a similar vertically integrated business model, sustainability at its heart, sound employee practices and strong relationships with fishermen but operating on a much bigger scale, Clearwater is an ideal fit for Macduff.

“This deal is great news for our operations in the UK, bringing investment and access to new markets within an extremely successful and respected business.  It provides learning and development opportunities for our staff as we share best practice with Clearwater and it gives fishermen access to more markets.”

Ian Smith, CEO of Clearwater said, “The acquisition of Macduff brings together two of the world’s leading and fastest growing vertically integrated wild shellfish harvesters. The transaction will allow Clearwater to integrate its vessel management and sustainable harvesting practices, innovative processing technologies along with its global sales, marketing and distribution footprint into Macduff; a company that already possesses a talented management team, excellent resource assets and a strong presence in Europe, the world’s largest and most valuable seafood market.  Our companies have been building a working relationship for more than three years and we are confident Macduff represents a highly attractive investment with a strong strategic fit for Clearwater.”

Steven Petrow, Partner at Change Capital Partners, said: “When we invested in Macduff in 2011 there was a compelling opportunity to transform the business through international expansion and strategic acquisitions. Thanks to our highly successful partnership with the Beaton family and Management we have delivered on all fronts and are incredibly proud of Macduff’s achievements.  This has been a very successful investment and we are convinced that the next chapter in the company’s history will be very exciting.”

Macduff was advised by Burness Paul, KPMG and Anderson Anderson & Brown.

It may seem an exaggeration to describe British supermarket chain Tesco as ‘struggling’ as they announce underlying profits of £354m for the first half of the financial year, but considering that figure was £779m for the same period in 2014, the firm has seen a 55% decrease in profitability.

The pre-tax profit figure tells a healthier story at £74m, compared with a £19m loss for the same period in 2014. Meanwhile like-for-like sales have dropped 1.1% in the UK, but overall sales volume has risen 1.4% and the total number of transactions at Tesco in the first half of its financial year are also up 1.5%.

So what does all this really mean? The answer is somewhat complex, but the Tesco chief executive Dave Lewis who arrived from Unilever just over a year ago is rebuilding the company after they announced the worst results in their history in April. Those results showed a record pre-tax loss for the financial year to the end of February of £6.4bn.

Lewis has adopted a strategy of putting pressure on profits in the short term by introducing widespread price cuts and increasing the number of staff on the shop floor, to attempt to attract customers back.

Tesco have sold their South Korean Homeplus stores and reduced their overall debt by £4.2 billion in the process, but they have also confirmed that to meet the UK government’s potential National Living Wage of £9 an hour for workers by 2020 it will cost them about £500m.

Interviewed about the latest set of results by the BBC, Mr Lewis commented, “If I compare it to the second half of last year, the first half of this year feels like we’ve made some progress. We obviously had some issues to deal with, we dealt with them. It meant that in the second half of last year we made no profit whatsoever in the UK.”

“Our sales are growing compared to where they were either a year ago, or indeed in the second half of last year and we’ve generated some profit as we rebuild the profitability of Tesco business.”

Tesco’s announcement of poor results come shortly after competitor Sainsbury’s predicted rosier than anticipated full year profits.

The UK supermarket scene is an ultra competitive landscape. In relative terms sales are still dominated by the big four supermarkets Asda, Morrisons, Sainsbury’s, Tesco, who had a combined market share of 73.2% of the UK grocery sector in the quarter ending 4th January 2015.

That is a small decrease from 74.1% in 2007, but the ‘big four’ are coming under increasing pressure from discount retailers such as Aldi and Lidl.

Tesco plan to strike back with additional price cuts, after this week’s announcement of their underlying profits essentially dropping by more than half in the first six months of the financial year.

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