THE latest supermarket sales and market share data show what an uphill battle Tesco and Morrisons face in restoring their lustre for customers.
Both continued to falter in the 12 weeks to 22 June, according to the latest data from Kantar Worldpanel. As all the majors have hit the price promotion button to counter the relentless rise of the German discounters Aldi and Lidl, it is clear Tesco and Morrisons are not seeing an immediate feel-better factor.
Tesco’s sales fell 1.9 per cent year on year, while Morrisons’s were down a horrendous 3.8 per cent. By contrast, Aldi and Lidl’s sales were up 35 and 22 per cent respectively, continuing the gangbusters trend from the previous quarter.
Most conspicuous from the latest data is how Asda and Sainsbury’s have done better than their big two rivals in resisting the incursions of the discounters. Asda’s sales were up 3.6 per cent, while Sainsbury’s rose 3 per cent. In addition, the move by Sainsbury’s to counter the discounter threat by launching a price-cutting joint venture of its own, via the restoration of the Danish Netto to the UK, looks shrewdly combative.
Whether the Netto initiative was the strategic parting gift of former Sainsbury’s boss Justin King or the lateral-thinking debut of successor Mike Coupe is interesting, but at least it shows a willingness to fight fire with fire on the flanks while not taking Sainsbury’s eyes off its traditional profit-earning business.
Sainsbury’s and Asda’s main advantage over Tesco and Morrisons is they have not suffered self-inflicted wounds, such as Tesco’s disastrous foray into the United States and Morrisons’s tail-end-Charlie status in online shopping and convenience stores.
In the wider picture, the price slugfest in the sector may be bad for shareholders for some time yet, but it is certainly good news for shoppers.
La Senza in corporate changing room again
THE frill has gone out of it for La Senza for the second time in just over two years. The lingerie chain is again in administration, with the obvious feeling of déjà vu.
Again hundreds of jobs are at risk, again new buyers will be sought, and when the dust settles there no doubt will be an even more slimmed-down version of the business than there was after the last rescue by Marnixheath, the British arm of an Arabian retailer. At best.
Slimmer and fitter is a corporate cliche, but the trouble when a company comes out of administration is that it is often arguably just slimmer. Otherwise the arithmetic doesn’t add up to address the trading woes it had in the first place.
La Senza’s tribulations show administration can be just a staving off of problems rather than averting them.