The big supermarkets’ annus horribilis shows no signs of improvement today, as Sainsbury’s posted a 6% slump in first half profits.
The retailer said sales had fallen 2.1% and will continue to fall for the next few years as it deals with what it terms ‘structural change’ in grocery.
That change centres largely upon people shopping for fewer products, more often at local shops as well as customers leaving in droves for bargain boys Aldi and Lidl.
As a result new Sainsbury’s boss Mike Coupe has developed a strategy dubbed ‘Evolving to win’. This involves investing in price, slowing down opening of new supermarkets and cutting costs to the tune of £500 million.
Coupe said today that a quarter of its stores are unprofitable or marginally profitable and he has mothballed 40 planned new shops.
He said more non-food products will be fitted into extra space, including its Tu clothing range, along with kitchenware. It will also bring in more concessions, similar to the Jessops and Timpsons shops already in store.
But is this really enough to stop the march of the middle classes down the road to Aldi and Lidl?
He has a long road ahead of him. Thanks for joining us.Reuse content