In their write-ups of yesterday’s Sainsbury’s results, the papers have seized upon CEO Mike Coupe’s contention that the growth of the discounters Aldi and Lidl is slowing down.
Coupe said that Aldi and Lidl would find it increasingly difficult to open new stores in areas without fierce competition and had been put under pressure by the leading grocery retailers committing hundreds of millions of pounds to cutting prices (The Telegraph)
While The Times (£) writes that the type of no-frills supermarket operated by Aldi and Lidl is in danger of reaching “saturation” in Britain, Sainsbury’s claimed, adding that an exodus of its shoppers to low-cost rivals was slowing.
The Telegraph’s Questor column was unmoved by Sainsbury’s optimism over its trading prospects, noting that: “Profit, dividend and sales are all expected to fall in the year ahead and until there is a concrete sign of profits hitting bottom and beginning to recover we stick with our cautious view”.
Questor also looks at Imperial Tobacco and has a far more positive view. “The boss of Imperial Tobacco described the first half results as boringly consistent. Questor has absolutely no problem with that when pre-tax profits of £1.15bn came in ahead of market expectations and investors were rewarded with a 10pc increase in the interim dividend.” (The Telegraph)
Imperial Tobacco is prepared for tweaks to the $27bn Reynolds American takeover of Lorillard when US competition authorities rule on the deal that will more than triple the British tobacco company’s market share in the US. However the UK-listed tobacco firm remains confident the deal will be approved. (The Financial Times £)
Meanwhile, political chaos under Isis in Iraq is having an unexpected impact on sales of tobacco, according to half-year results released by Imperial Tobacco. (The Independent)
Lower prices have taken £532m out of supermarket tills, according to the latest data from Kantar Worldpanel. All four of the UK’s biggest supermarkets are seeing sales fall as grocery price deflation reached a new record in the first three months of this year. (The Guardian)
After Britain’s three biggest listed supermarkets have revealed combined pre-tax losses of almost £7.3bn in the last two months, The Telegraph looks at the key reasons why they are losing money. The paper argues: “Selling food should be a simple business, but Britain’s biggest supermarket chains are facing their biggest challenge for a generation”. (The Telegraph)
Better sales of more expensive beer helped AB InBev shrug off the overall drop in volumes at the Belgium-based brewer behind Stella Artois and Budweiser. Group revenues climbed to $10.5bn, an organic growth rate of 6.2 per cent thanks to strong performance in China and parts of central and Latin America, in its first quarter. (The Financial Times £)
Poundland has decided to go ahead with an in-depth review by the competition regulator that could either save or sink its proposed £55million acquisition of rival 99p Stores. The phase two review is expected to take about six months, with a verdict likely by the end of October. (The Daily Mail, The Guardian)
Aldi and other discount supermarkets are to blame for a slip in operating margins at Wetherspoon in the first three months of the year, according to the pub chain’s chief executive, Tim Martin. Martin blamed “Aldi and others opening outside the big cities” for a slip in margins at the pub company. (The Independent)