Sales at British supermarkets fell below the £100bn mark in the second quarter of the year – the first time they have done so since 2010.
According to The Share Centre’s Profit Watch UK study, food retail revenues were down 3.1% to £99bn. The study attributed the drop to the ongoing price war and the increased popularity of hard discounters.
However, while sales are falling, it is expected that the slump in the pound will improve profits, as around 40% of the sales of British listed companies’ are declared in US dollars. Exporters and companies with a large international presence will also benefit from the drop in the value of the pound.
Despite this, Helal Miah, investment research analyst at The Share Centre, noted that the uncertainty following the Brexit vote will further impact overall economic growth. Miah added: “The implications of the economic slowdown will mean lower demand for sectors such as housebuilders and retailers, while the travel industry is already feeling the effects. Financial services may suffer too, if passporting to the EU falls by the wayside.”
- The issue for suppliers and the mults will be the extent to which these changes are permanent, a response to structural change in the market.
- In which case, instead of awaiting a return to the old days, stakeholders might be better served by focussing on today’s realities.
- …and attempting to grow at the expense of the competition.