Tesco has reported a 6.9pc decline in annual profits as Britain’s biggest retailer struggles to reverse a fall in sales. The supermarket group said that underlying pre-tax profits dropped to £3.1bn in the year to the end of March with sales under pressure in the UK, eastern Europe and Asia.
“The once dominant forces of Tesco, Morrisons, Asda and Sainsbury’s are all seeing their market share fall in the UK and are losing sales to Aldi, Lidl and Waitrose,” he says. US situation
Trader Joe’s is the emblem of success in the limited assortment category: With its low prices and a tightly-edited collection of products, the store is pulling down $1,723 in sales per square foot, compared to $552 per square foot at Publix or $496 at Kroger.
These supermarkets have ultra-narrow profit margins, building their success with shoppers who come back frequently and regularly fill their cart to their brim. And so Ahlburn says their chief challenge in this climate will be to stay profitable.
Particularly taken with this:
British retailer Morrisons says chief executive Dalton Philips to leave; sales in Christmas retail period down 3.1% http://bbc.in/17CKW3F
Looking at my own food shopping, there are four major reasons my local shop around the corner now has my business:
1. It’s local;
2. It now runs a card machine;
3. It’s also a paypoint for utilities bills etc.
4. It has a narrow range I can influence.
What I mean by this last one is that the place is small enough for the boss to ask certain customers from time to time what they like, what they don’t. It’s not a 100% correlation between what we want and what he gets in but it’s pretty good.
Only thing he’s not great on is fresh greens. Perhaps he’ll get some in. If he had, say some white cabbages, I’d certainly buy mine from there and for a certain amount over the odds.
If ASDA ask £1 for a white cabbage and this guy asks £1.59, that’s a huge markup comparatively but I’d pay it on selected items I’d use over a week but would not pay such a markup on, say, daily milk.
The Trader Joe story above is not unlike the pound shop and convenience store story. Narrower range, quality food [to a point – good enough for the job anyway] far lower price, surprising things from time to time.
Aldi is good that way – no frills and carrying lines they put in the centre bins which vary but bargains can be had, e.g. I picked up some mid-quality boat shoes for a ridiculously low price.
There are things I’d still pay out for, e.g. tops, jeans but there are things I wouldn’t. Sponge scourers is one I’d buy the generic brand.