Asda’s chief executive Andy Clarke says he has never seen profitability fall so quickly in the UK supermarket sector.
In an interview with BBC 5 live’s Wake Up to Money, which was broadcast today, Mr Clarke said discount grocers have had a striking impact on retailing.
“The level of profitability decline in some retailers over the course of 2014 - we’ve never seen it before,” said Mr Clarke. “It suggests 2015 is going to be equally as challenging.”
Figures published earlier this month showed the challenges faced by some of the biggest names in retailing.
Morrisons’ sales fell a disappointing 3.2 per cent in the three months to December 7, making it the worst performer out of the “big four” supermarkets.
The Bradford-based grocer has been trying to lure back shoppers by slashing prices and price matching discounters Aldi and Lidl, but data from Kantar Worldpanel showed its market share fell to 11.2 per cent from 11.6 this time last year. Tesco sales fell by 2.7 per cent, its smallest decline in sales since June, while Leeds-based Asda’s sales fell by one per cent and Sainsbury’s by 1.8 per cent, making them the best performers of the “big four”.
Aldi’s sales grew by an astonishing 22.3 per cent, taking its market share from 4.0 per cent last year to 4.9 per cent, while Lidl’s sales rose 18.3 per cent to give it a market share of 3.7 per cent, up from 3.1 per cent.
The data showed that shoppers have saved £182m on grocery offers in the past three months as supermarkets slashed prices in a bid to outdo each other and win custom back from the discounters.