Sainsbury's announce £150m of price cuts
Sainsbury's have got 'round to noticing the "unstoppable growth" of discount supermarkets like Lidl and Aldi and, as a result, have announced that they're going to be doing £150m worth of price cuts, as it funked its way into a first-half loss.
And worse still, they predict that underlying profits will be lower in the second half of the year than the first.
The price cuts mean that Sainsbury's will be cutting back on spending on new stores, according to Mike Coupe, the new chief executive of the retailer. Of course, with all this, their shares are falling, down 4%.
Mike Coupe added that, after doing a review of the company, he's found that customers and staff want a "better, brigher, sharper Sainsbury’s". What customers want, in plain English, is a reasonable price for decent products. Also, it'd be nice if bosses at supermarkets stopped being so pessimistic and sounding for all the world like they're going to top themselves in the veg aisle. All we want is a good price and non of that emo business, thank you very much.
John Ibbotson, director of the retail consultancy Retail Vision, told the Guardian: "Just like the old British empire, the big four are now in an irreversible decline. The middle classes are on the move, and their destination is Aldi and Lidl. Does Sainsbury’s have the market savvy to stop the grand exodus, and retain a core customer? The upheaval will go on for years, and the low-cost discounters look set to be the main winners. The only limit is how many stores they can open.”