JP Morgan suspends analyst after Asda ‘ruse’

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JP Morgan has suspended an analyst amid accusations that he deceitfully gained access to a meeting Asda held with suppliers.
Rickin Thakrar, a food retail analyst at the investment bank, wrote an explosive 14-page research note with information gained from a suppliers meeting held last week, despite having allegedly been struck off from the delegate list by the organisers.
In his note Mr Thakrar wrote: “On Thursday, we attended the Asda IGD trade briefing.” People close to the situation are examining whether Mr Thakrar sent a junior colleague after IGD, the food industry researcher that organised the event, banned him from attending the supplier-only meeting.
JP Morgan declined to comment last night. But it is understood to be investigating whether Mr Thakrar broke any Financial Services Authority or in-house rules in gaining intelligence from the meeting. Mr Tharkar could not be reached for comment.

Wal-Mart, Asda’s parent company, is understood to be taking a keen interest in events. Mr Thakrar’s note disclosed potentially market-sensitive information on Asda’s strategy, including a move towards smaller stores and less emphasis on eyecatching promotional activity.
An Asda insider said: “This is potentially very serious for the analyst and JP Morgan.”
Mr Thakrar did not cover Wal-Mart, but he was using Asda, the second-largest British supermarket, for insights into its publicly quoted competitors.
JP Morgan has contacted Asda to assure the supermarket that it is taking the complaint seriously. Asda and IGD also declined to comment.
Andy Bond, Asda’s chief executive, dismissed Mr Thakrar’s research note yesterday, as he revealed the supermarket’s fourth-quarter trading figures. “He really didn’t understand his content, because it was related to detailed supply-chain issues,” he said.
The supermarket vowed yesterday to ditch promotions after it blamed its recent lacklustre performance on “distracting” special offers by rivals.
Asda said that suppliers were passing on lower food inflation as promotions, rather than cutting their base prices and said that such “high-low” pricing played into the hands of its competitors and that it had “allowed itself to become too promotional”.
Asda maintained that it was disproportionately hit by snowfall in December and January because it lacks a small-store format, unlike most of its rivals. The company said that it would increase emphasis on smaller stores.
Mr Bond claimed that Asda would return to its “everyday low price roots” by reducing the number of promotions it holds in favour of lowering prices across the board.
He branded promotions as “weapons of mass distraction” and claimed rival supermarkets engaged in illusory price cuts.
“In times of falling inflation suppliers invest more heavily in promotions rather than investing in reducing the base price of their products,” Mr Bond said.
“This type of promotional activity benefits high-low retailers who are less interested in lowering real prices.”
He said heightened promotional activity was “not good for us, not good for customers, not good for suppliers”.
Analysts said that Asda’s tougher stance on pricing marked bad news for its rivals.
Dave McCarthy, a retail analyst with Evolution Securities, said: “This is a very aggressive statement by Asda, and echoes the Wal-Mart statement also released today. It is a long time since we heard Asda ‘rattle the drum’ as much as it has today.”
Wal-Mart revealed that like-for-like sales at its US stores fell by 1.6 per cent in the fourth quarter.
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