Recent investment by the big four multiple supermarket chains has not been able to arrest their decline in performance, according to analysis by Booker’s chief executive Charles Wilson.
Speaking at last week’s IGD Convention, Wilson observed that in the last four years the big four had made £12bn worth of capital expenditure, only to see their combined market share drop 3% and their operating profit decline by £1.4bn. At the same time, consumers are increasingly using their local convenience stores and more than half of all shoppers (54%) visit the discounters.
“Whereas once there used to be only one or two grocery stores in the same post code, now there are often nine or 10,” he said. “The aspirational retailers are doing well, and it is really exciting to see the number of new retail formats, such as farm shops, farmers’ markets, delis and nutri-specialists.
“Suppliers will go where the growth is,” he added.
At the same event, former Tesco finance director Andrew Higginson said that in recent years the major supermarkets had spent too much time “focusing on each other” instead of talking to their customers and giving them what they wanted.
Earlier, chief executive Joanne Denney-Finch said that, if current trends continue, supermarkets and superstores will account for only around half of grocery sales in five years’ time, down from 63% today. There had been a “shopper backlash to complexity”, with 55% of consumers preferring price cuts to multi buys, compared to just 17% seven years ago, she said, adding that she believed big stores can be reinvigorated by refocusing on the consumer through shopper-friendly technology and by offering genuine value.