Wed, Sep 10, 2008 | 18:15 BST
Morrissons’ move could turn into “bloody war,” says analyst
Speaking with the Guardian, Altium Securities’ David O’Brien reckons that Morrissons’ decision to slash prices is a shot across the bows of supermarket competitors in the UK.
“The opening salvo is what could turn out to be a very bloody war,” said O’Brien in a seller’s note.
“Game Group has a price promise and as a result will be forced to match the levels offered by the food retailer,” he went on. “We think it highly likely that other retailers will follow suit in the run-up to Christmas, resulting not only in Game Group being forced to price match but also to increase its promotional spend in the press and on TV.
“Our expectation is that little help will come from hardware sales, as Microsoft has just reduced the entry price of the Xbox 360 to USD 199 (GBP 115), with Sony likely to follow suit.
“We think the above combination is likely to result in a reining in of profit estimates closer to Christmas.”
More through the link. Thanks, GI.
By Mike Bowden
16 
Posted in: Retail, Trade, UK
Tags: Altium Securities, David O'Brien, morrisons
16 comments
#1
patlike
10/09/08, 6:04 pm
BLOODY WAR.
#2
Psychotext
10/09/08, 6:06 pm
BRING THE NOISE!
#3
Syrok
10/09/08, 6:07 pm
Let’s hope the war spreads across Europe.
#4
patlike
10/09/08, 6:09 pm
People wearing headsets and Tesco uniforms are pushing little men round on a massive map of Britain as we speak.
#5
Psychotext
10/09/08, 6:10 pm
I’m more concerned MediaMarkt and Lidl will get involved…
#6
Syrok
10/09/08, 6:12 pm
You have them in the UK?
#7
Psychotext
10/09/08, 6:16 pm
We have Lidl and Aldi… but to be honest it was actually a subtle play on what you said about the war spreading across Europe.
#8
Syrok
10/09/08, 6:20 pm
Oh, I see what you mean. ^^
#9
morriss
10/09/08, 6:45 pm
I wish someone in Denmark would take note. My local EBGames (Gamestop) is selling Assassins Creed used for £35.
BARGAIN!
#10
wz
10/09/08, 7:48 pm
Does he mean a bloody war or a bloody war?
#11
Syrok
10/09/08, 7:58 pm
@morries: I know a place where you can buy Need for Speed Carbon (PS3) for 60€.
#12
scuz
10/09/08, 8:35 pm
a xbox 360 for £115? that’s absolutely mental.
#13
deanimate
10/09/08, 8:41 pm
hmmm….that is very tempting to buy one in to sell at a nice profit a bit later on. might give that a shot.
#14
el Croux
10/09/08, 11:45 pm
Games are too expensive. There is NO reason for them being so much, in ANY situation. No matter what.
If anyone manages to lower the price, then good on them.
#15
Bronco
11/09/08, 1:51 am
Croux, what a very silly post. No reason, no matter what? Not even that companies who make games are profit-seeking concerns with employees, investors and debtors? Not even that they need to make money to pay their employees, reward their investors and pay back their debtors, and to spend on future game production, or show earnings growth to seek new investment from investors? Let me introduce you to a new concept in global trade:
http://en.wikipedia.org/wiki/Capitalism
Or perhaps you are an expert in the sector? If so, kindly provide us with a breakdown of the cost-profit ratio, just for a start, then perhaps the break-even point for a recent game or two, next to the revenue and net profit figures for each game named. Then move on to the margins enjoyed by retail, adding their break-even points.
#16
Blerk
11/09/08, 8:46 am
I bought Wii games from Morrisson’s this week and SAVED A FORTUNE! \o/