Retail therapy

4 October 2004

A number of the sector s grand old names Sainsbury, Safeway, Boots and M&S have been trying without success to arrest decline. One problem is that the environment is inclement, and getting more so. Another is that turnarounds take a long time.

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In food retail, industry growth fell on a four week basis to 3.4% from 4.6%. Tesco, the largest supermarket group in the UK, reported that its likeforlike growth in the second quarter of the year was 8.8%.

According to TNS data, Sainsbury's implied threemonth growth rate was 0.4%. On the same data, the Morrison group which includes Safeway saw a four week fall of 6%.

In nonfood, Marks & Spencer reported that total likeforlike sales in the 10 weeks to 18 September fell by 6.3%. Clothing sales were down 9% and food by 3.5%.

Boots, the UK chemist, recently said that its gross margin in the first half of the year declined by 180 basis points 50 basis points more than expected by the market.

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