Simon Neville, retail correspondent at The independent and Evening Standard, discusses tumbling profits on the high street.
It’s been a bad week for the big supermarkets.
After disappointing sales, Morrisons’ Chief Executive was fired from his position. Sainsbury’s announced 500 job losses and Tesco will be closing 43 of their stores.
Simon says the problem is partly down to new shopping habits, as people often avoid the larger shops in favour of stopping in at a convenience store on the way home.
However, profits for both Aldi and Lidl have jumped by over 15 per cent for both companies, indicating shoppers will make the effort to shop in a large shop if the savings are significant enough.
Some of the recent poor performance can be attributed to the damage done by Black Friday. Game today announced they had a disastrous Christmas after they sold too many consoles and games at low prices, at the cost of profits. Their shares have dropped 34% so far today.
John Lewis also announced Black Friday backfired for them. They upped sales but made little profit which Simon says perhaps gives credence to the mantra “sales vanity, profits sanity.”