Major closures in UK supermarket war to come, warns Waitrose boss
Mark Price, CEO of one the UK’s “challenger” supermarket chains Waitrose, warned that the ‘big four’ retailers may well start closing down stores in a big way in the supermarket war. Not since the birth of self-service supermarkets in the 1950s have problems facing grocery retailers been so stark, he added.
Waitrose, which is part of the John Lewis Partnership, is gaining market share at a faster rate than German discounters Lidl and Aldi.
News update Nov 18, 2014: A new report showed that for the first time ever supermarket sales declined in the UK.
For the four giants – Tesco, Asda, Sainsbury’s and Morrisons – however, times have never been so hard. All four are suffering from sales declines this year, as UK shoppers opt for low prices above anything else.
In an interview with the Sunday Telegraph, Mr. Price said he was not sure whether all of Waitrose would 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.”
The grocery retail sector is going through its biggest upheaval since the 1950s, says Mr. Price.
Mr. Price said that those who survive will be the ones that can reinvent themselves in a market overwhelmed by hard-pressed households, rapidly-increasing Internet sales, and a shifting preference towards smaller convenience stores.
Homebase, the home improvements chain, is closing a quarter of all its physical retail outlets. Mr. Price believes the grocery business will have to go the same way.
Mr. Price said:
“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.”
Experts say the large supermarket chains have been too long in denial regarding the dramatic changes in retailing, and some of them have perhaps left it too late.