At the start of the year some of the most bearish City analysts of recent years have been sweet on the supermarkets, showing a particular appetite for the Tesco and Morrisons turnaround stories.
The source of their renewed optimism? Partly that it couldn’t get any worse than last year - though, in the case of Asda’s Q2 results at least, it patently has. Partly it was the new broom effect from new management. But mostly they bought the strategy: assuming that by lowering prices and closing the price gap on the discounters the lead they’ve opened up would close.
This week’s Kantar figures are a painful reminder that it’s not cutting it: sales at Tesco, Asda and Morrisons are again down and Sainsbury’s sales are flat - while Aldi and Lidl, after a slight slowdown earlier in the summer, widened their lead over the big four once again. And if the latest four-week figures from Kantar are to be trusted, it’s Tesco and Morrisons where the recovery has most markedly slowed.
Both are clearly hard at work. Tesco is putting the finishing touches to its Project Reset. Morrisons is empowering store managers with a new store-led regional buying initiative.
Sainsbury’s also announced that it would increase pay by 4% - above the minimum wage - a counter-intuitive move under the circumstances. One wonders if they can translate the positive PR they received into positive sales growth. In the meantime CEO Andy Clarke will be encouraged by the ringing endorsement for Asda from suppliers - rating it the number one retailer in Kantar’s first UK PoweRanking survey.
All the same, it’s heavy going right now. Even Lidl is trialling a form of loyalty card - although it sounds more like an electronic vouchering scheme to me.
One thing is clear. The Rugby World Cup can’t come soon enough. Not just for rugby fans. Not just for sponsors like Heineken and Coca-Cola. The whole industry needs a good World Cup to make up for the lack of a major sporting event this summer, and the largely indifferent weather, with another grey and wet forecast for the August bank holiday.