Three of Britain’s biggest supermarket chains will reveal how they performed over the Christmas period this week, with analysts fearing a slump caused by deflation and cheaper rivals.
It is expected Tesco, Sainsbury’s and Morrisons are to confirm that sales fell in their trading updates – and although Asda’s fourth-quarter results are only due in mid-February, the retailer is already piling on the pressure by upping the stakes in an ongoing price war.
Over the past couple of days, Asda announced plans to spend a further £500m on price cuts in its stores, as the supermarket’s chief executive warned “radical action” is needed to win back customers who now favour discount brands such as Aldi and Lidl.
Andy Clarke has predicted 2016 “will be another year of intense pressure” with “radically changing customer shopping habits” thus impacting tumbling prices on the high street.
Last week, it emerged that tight margins on food items were hit again in December.
In what could be an indication of a downturn for large grocers, Waitrose also saw like-for-like sales tumble by 1.4{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} over Christmas.
This was despite record trading days in the run-up to Christmas.
Meanwhile, a 0.4{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} increase in like-for-like sales in Marks and Spencer’s food division was not enough to alleviate the pressure on its chief executive Marc Bolland, who is stepping down after dismal trading figures across its general merchandise division, which includes clothing.
Other non-food retailers who will be announcing their results this week include online clothing brand Boohoo.com, and its long-standing rival Debenhams.
Source: Sky Business News