A LEADING grocer has raised the prospect of supermarket closures in the UK as major groups struggle in cut-throat trading conditions.
Mark Price, chief executive of Waitrose, said the problem facing food retailers is as dramatic as the introduction of supermarkets in the 1950s. Waitrose, part of the member-owned John Lewis Partnership, is growing market share and increasing sales faster than any of its rivals bar Aldi and Lidl, the German discounters.
It is a different story for the Big Four however; Leeds-based Asda joined Tesco, Sainsbury’s and Morrisons in negative sales territory last week after posting its worst quarterly sales performance in nearly a decade.
Mr Price told The Sunday Telegraph it is “incredibly hard to call” whether all of Waitrose’s will survive. He said: “The more space that is put down from this point on, the more you have to worry about the economics of the industry. So, I think it is no surprise that a number of players are saying they are not opening any more space or they are opening only limited space, because every new bit that opens makes the economics harder and harder.”
He said survival depends on the companies’ ability to reinvent themselves in a market squeezed by hard-pressed households, rising online sales and the growth of convenience shopping.
Mr Price pointed to the example of Homebase, which is closing a quarter of stores. He said: “I think that food is probably four or five years behind non-food. What you have seen over the last five years is 12 per cent of non-food space taken out of the market.
“You have had no food space retired over that period. In fact, what you have been seeing is food space growing by 3-5 per cent. So, more and more space has been added at a time before you get the impact of the internet, convenience shopping and all the other shifts.”
Retail analysts said large supermarket groups have been unwilling to recognise dramatic changes in retailing.