There was grim news from three major food retailers this week with a profit warning from Sainsbury and dismal second quarter trading updates from Big Food Group and M& S.
Second quarter like-for-like sales were down 4.1% at Booker and 3.9% at Iceland.
Analysts said this was worrying given most of the stores earmarked for conversion to Iceland’s new convenience format had now been refurbished and sales were still going backwards.
One said: “The statement contains no hope that there are any fresh answers to BFG’s strategic problems.”
The company’s claims its woes reflected tougher market conditions didn’t wash, he added: “Management bleats about worsening competitive conditions, but the industry saw like-for-like growth of about 1% over the quarter - BFG just failed to capture it.”
The picture at M& S was also pretty depressing. Although the decline in clothing sales had steadied towards the end of the quarter, like-for-like food sales were down 2.8%.
Meanwhile, Sainsbury’s troubles were thrown into sharp focus after it issued a statement revealing first-half profit would be between £125m and £135m compared with £366m last year.
However, strict competition rules would hamper the exit strategy of any venture capitalists looking to buy the company, said analysts. It was also difficult to see how a VC could turn Sainsbury around in the current competitive climate.
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