Belfast Telegraph

UK battling back against German rivals in store wars

by business reporters

The UK's biggest supermarkets are expected to have fought back strongly in the battle for Christmas shoppers as sales momentum at German competitors such as Lidl slows.

City analysts predict Tesco, Sainsbury's and Asda, along with Morrisons - which does not have any stores in Northern Ireland - have all performed better than in previous years, when they have taken a hammering from the German rivals, who also include Aldi.

Clive Black of Shore Capital said: "What will be more established as a trend to our minds is the better performance overall from the majors as a collective, with Tesco and Morrisons set to lead the way with possibly positive like-for-like sales, whilst Sainsbury's will have Argos in tow - the former could be negative, the latter positive.

"Asda may just be showing signs of turning the corner after a tough 30 months."

In Northern Ireland, latest figures show Asda is now the second most popular supermarket. Overall, however, Asda has had a torrid 2016, reeling off a series of shocking sales figures culminating in the departure of boss Andy Clarke.

Tesco, which has 50 stores here, is in recovery mode as boss Dave Lewis attempts a clean break from the shambolic reign of his predecessor Philip Clarke.

Meanwhile, Morrisons is in the midst of a barnstorming turnaround under chief executive David Potts.

Retail analyst Nick Bubb noted that trading performances have been reflected in share prices this year.

He said: "The Tesco and Morrisons share prices have done pretty well (up 38% and up 55% respectively), reflecting the recovery in their trading momentum, which has coincided with slowing momentum for Aldi and Lidl."

The German pair have in recent years notched up a series of record trading performances over the festive period, wiping the floor with the established players.

But Mr Black said: "We think it (Christmas trading) will be a little less spectacular for Lidl in particular than the last few years as the chain has seen a big deterioration in sales momentum in recent months.

"For Aldi, it has had falling like-for-like sales in the UK for some time now, indeed Christmas 2015 was probably negative.

"Accordingly, it has a more favourable comparative than Lidl and so should come out a little better of the two. Both fascias continue to open stores apace and this new space is the driving force of their sales momentum."

Belfast Telegraph

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