Martin Flanagan: Supermarkets brace for more competition

It's 'game on for competition' in the grocery sector, writes Martin Flanagan. Picture: Contributed
It's 'game on for competition' in the grocery sector, writes Martin Flanagan. Picture: Contributed
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As the sales data of Britain’s supermarkets have come in over the final quarter of last year and early into 2017, two key themes seem to have emerged.

Tesco and Morrisons look as if they have been the main winners among the big four, as the turnaround programmes of their respective chief executives, Dave Lewis and David Potts, have borne fruit.

And although some of the steam seems to have faded from same-floorspace sales at Aldi and Lidl it has not affected those discounters’ total sales, with their continuing aggressive store-opening programmes.

READ MORE: Aldi usurps Co-op to become UK’s fifth-biggest grocer

Indeed, Aldi has supplanted the Co-op as Britain’s fifth largest food retailer as its sales lifted more than 12 per cent year-on-year in the 12 weeks to 29 January, according to data received yesterday from Kantar Worldpanel.

Lidl, meanwhile, saw sales jump more than 9 per cent and has a market share of 4.5 per cent, similar to Waitrose. Aldi’s achievement is particularly noteworthy. Just a decade ago, it was Britain’s tenth largest supermarket, with a slice of the grocery market of less than 2 per cent.

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It is probably no coincidence that the march of the discounters has coincided with a prolonged period of public austerity.

Meanwhile, Sainsbury’s has bought Argos, Tesco has put in an agreed offer for wholesaler Booker, and Morrisons has got into bed with Amazon.

Deflation is also likely to be less of a factor in the supermarket aisles in 2017 as the depressed pound triggers inflation.

In short, it looks game on for competition in the sector this year, with the big boys perhaps less on the back foot against their smaller rivals than they have been for quite some time.

BP still bloodied, but less bowed

BP has unveiled more annual losses, but they are significantly lower, and after seven long years the oil giant seems to have finally put the human, environmental and financial damage of the Gulf of Mexico oil spill behind it.

Chief executive Bob Dudley has sold off a number of assets and taken a hard look at the realistic financial returns amid low oil prices.

BP has kept its dividend flowing, vital for the UK’s index-tracker pension funds, through the bad times. It’s been a long haul, but maybe there is some daylight now.

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