THE NUMBERS are dire. Despite splashing out more than £3bn over the past year, the UK’s three biggest listed firms – Tesco, Sainsbury and Morrisons – are all shedding market share, with the former showing its weakest growth in 11 years.
Analysts are slashing the sector left, right and centre, and with Tesco expected to reveal another set of disappointing results this morning (see www.cityam.com for updates), chief executive Philip Clarke is likely to end up right in the centre of a rather uncomfortable spotlight.
It’s a difficult number to stack up, but analysts at HSBC claimed yesterday the UK’s biggest retailer has lost around 1m store visits on a like-for-like basis over the past year. Though the supermarket is still doing well in the London area – opening both giant and local stores and targeting its product mix to fantastic effect – elsewhere it’s clearly failing to impress. Why pick Tesco when on the same retail park there’s a cheaper, newer (and dare I say it, trendier) Lidl next door?
Investors must be tiring of Clarke’s lack of direction. But he’s not the only supermarket chief executive feeling the heat. Yesterday’s Kantar figures were just as uncomfortable reading for Morrison’s Dalton Philips, who saw his market share dip by 70 basis points while shedding almost as many store visits as Tesco.
With the group’s AGM coming up tomorrow, it’s unlikely that either Philips or Clarke will be getting a restful night’s sleep as shareholders tire of the decline.