William Low abandons drive south

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The Independent Online
WILLIAM LOW, the Dundee-based supermarket group, is abandoning its strategy of moving southwards because of increased competition and customers' demand for low prices, writes Heather Connon.

The group has just opened a store in Loughborough, Leicestershire, and James Millar, chairman, said that would mark the southern limit of its expansion.

He added that the group planned to open about 60,000 square feet of new space a year. It will also accelerate the closure of smaller stores.

Competition from discount retailers is fiercer in Scotland than in other parts of the country, with Shoprite having 61 stores and an 8 per cent share of the market. Mr Millar believes it is likely that discounters will eventually take about 15 per cent.

The group is responding by introducing tertiary brands and adding to its own-label chains. Three of its new superstores are also offering lower prices across the board.

The plans were revealed as Low announced a 2.5 per cent rise in pre-tax profits to pounds 21.1m for the year to 4 September on sales 6.4 per cent ahead at pounds 446.9m. Most of the rise was due to new openings; like-for-like sales grew just 0.5 per cent.

Earnings were 25.11p, up from 24.92p, and the final dividend was held at 5.7p for an unchanged total of 8.4p. The shares dropped 6p to 154p.