Blackfriar: Can the UK's supermarkets buck the retail doom and gloom?

Morrisons will be hoping to shake off its recent position as the UKs worst big four performer
Morrisons will be hoping to shake off its recent position as the UKs worst big four performer
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All eyes will be on Kantar’s latest grocery stats which are out tomorrow to see whether the UK’s supermarkets can buck the trend on the high street in the all-important festive season.

Morrisons will be hoping to shake off its recent position as the UK’s worst big four performer and Asda will be hoping its festive message will be getting through to shoppers.

Last month’s Kantar figures portrayed a gloomy outlook for the big four supermarkets. Yorkshire’s Morrisons and Asda were the worst performing of the big four.

Kantar said Bradford-based Morrisons saw sales decline 1.7 per cent in the 12 weeks to November 3 while Leeds-based Asda’s sales fell 1.2 per cent.

Fraser McKevitt, head of retail and consumer insight at Kantar, said it was hard to pin down why Morrisons and Asda were both underperforming.

At a time when sales were supposed to pick up, he said the malaise is due to a combination of low confidence, political uncertainty and a shaky economy.

He said a combination of all of these things is leading to a general slow performance at the big four and Asda and Morrisons are included in that.

All of the big four supermarkets saw a slow start to the crucial festive period.

Sainsbury’s and Tesco proved slightly more resilient than their Yorkshire rivals with falls of 0.2 per cent and 0.6 per cent over the 12 week period.

Analyst Clive Black at Shore Capital said he had expected to see an improvement in trading momentum in the autumn, but this hadn’t happened when Kantar revealed its November statistics.

Mr Black blamed a cautious mood among consumers who are behaving as if we were in a recession, despite the UK not being in recession.

Whatever happens in the General Election on Thursday, we are unlikely to see any resolution to this malaise.

A Tory majority would see the UK leave the EU by January 31 and then attempt to do a trade deal in less than a year when it took Canada, Switzerland and Norway northwards of seven years to do their deals.

Indeed, the European Parliament’s Brexit coordinator Guy Verhofstadt has cast doubts that a year will be enough time. So we would have another Brexit deadline date of December 31, 2020 - the very worst time for retailers who stockpile Christmas goods.

The alternative to a Tory majority would be a hung Parliament and the chance of a minority Labour Government. This will only happen if voters in marginal seats adopt tactical voting. The Tories are very worried about the effect of the “two T’s” - turnout and tactical voting. Older Tory voters may be put off getting to the polls if a wet and windy snap hits the UK on Thursday, especially if they think a Tory majority is in the bag.

Likewise, lifelong Labour voters in the North who want to “Get Brexit done” may also decide the weather is a convenient reason for not getting to the polls and having to place their cross next to the Conservative candidate for the first time in their lives.

Meanwhile Liberal Democrat voters may be persuaded to hold their noses and vote Labour in Uxbridge and South Ruislip to get rid of Boris Johnson and likewise, Labour voters in Esher may vote Lib Dem to oust Dominic Raab. Everybody loves a Portillo moment (when Michael Portillo lost his seat to Labour in the 1997 Labour landslide under Tony Blair).

This dreadful Brexit malaise will be going nowhere in 2020 whatever happens and Britain’s grocery sector will just have to keep ploughing on amid confusion, Brexit fatigue and deep divisions.