Belfast Telegraph

Mixed year for supermarket sector

Britain's biggest supermarkets had a mixed year, with stories of herculean turnarounds under new bosses, the rise and rise of Aldi and Lidl and some of the worst corporate results in history grabbing most of the headlines.

Against the backdrop of a brutal price war, Asda reeled off a series of shocking sales figures indicating that it was losing the battle and the plot.

This culminated in the departure of boss Andy Clarke, after which it recorded a 7.5% plunge in like-for-like sales in the second quarter, its worst performance on record.

Its US owner Walmart parachuted in another Clarke, Sean, to replace him and he immediately set about slashing prices on hundreds of products as the grocery giant attempted to regain customers.

He at least arrested the decline. In November, Asda reported another hefty fall in sales, but this time it was only 5.8% on a like-for-like basis.

Morrisons, on the other hand, is in the midst of a barnstorming turnaround under David Potts.

The chief executive replaced Dalton Philips in 2015 and never looked back. In November the chain totted up a full year of sales growth following a prolonged period of stagnation under Mr Phillips.

Mr Potts has embarked on a number of measures to reverse the grocer's fortunes and earlier this year inked a new deal with Ocado and signed a landmark agreement with US online giant Amazon to supply fresh food to customers.

Morrisons has also piled into the price war, revealing in August that it was slashing selected meat and poultry prices by 12%.

Tesco is also in recovery mode as Dave Lewis attempts a clean break with the shambolic reign of his predecessor Philip Clarke.

In October, Mr Lewis rang up Tesco's third quarter in a row of rising sales and unveiled a three-year plan to get profits back on track.

He aims to slash costs by £1.5 billion over the next three years to help boost margins and return the group to bottom line profit growth.

Tesco's half-year figures showed that it was making progress and was moving on from a series of lows, including posting the biggest loss in its history last year and becoming embroiled in a £326 million accounting scandal.

But the embers of Mr Clarke's reign refuse to die out.

This year it emerged that Carl Rogberg, Chris Bush and John Scouler - the supermarket's former finance chief, managing director and food commercial head respectively - will face a trial in 2017 over the accounting scandal and could be handed lengthy jail sentences if found guilty.

The Serious Fraud Office charged the men with fraud by abuse of position, which carries a maximum sentence of 10 years, and false accounting, which carries seven years.

Mr Clarke will not face charges in the accounting scandal, according to his lawyer.

Tesco is also facing legal action from a group of 125 large investors who claim to have lost "well in excess of £100 million" as a result of the accounting scandal.

Bentham Europe, the firm fronting the action, said institutional funds have filed the lawsuit in a bid to prove that Tesco "made misleading statements to the stock market that omitted material information and which were relied on by investors when making investment decisions".

Despite this, Mr Lewis has been praised for the way Tesco has shifted its focus to the core UK supermarket, and also for his leadership during the Marmite saga.

The collapse in the value of the pound, sparked by the Brexit vote, sent the cost of imported goods soaring.

Supermarket suppliers responded in the only way they could: by raising prices. The most high-profile example was Unilver's attempt to charge more for Marmite.

Tesco was asked to stomach a 10% hike, and deliveries to the supermarket were halted when it refused, leading to a shortage in some stores.

Unilever, which is behind a host of household brands, has since warned that the prices of products will rise as a result of the collapse in sterling.

As forecasts for inflation continue to point upwards, shoppers are bracing for more increases in the new year, which many experts believe could drive more consumers into the hands of Aldi and Lidl.

Over the past 12 months, the German duo continued their march to seize more market share from the established Big Four players.

Sales at Aldi grew by 12% to £7.7 billion in 2015, with the grocer doubling its turnover in three years. But while the company confirmed like-for-like sales were still in positive territory, boss Matthew Barnes admitted they had slowed.

Lidl, which recorded revenues of £4.7 billion in 2015, parted company with UK boss Ronny Gottschlich, replacing him with Christian Hartnagel.

Mr Gottschlich spent 16 years at Lidl, including six years as the company's Great Britain CEO, overseeing its meteoric rise from bit-part player to established contender.

Blood was also shed in the frozen food aisles. Iceland (the country) launched legal action against Iceland (the supermarket) over the use of its name.

The Nordic nation lodged legal papers at the European Union Intellectual Property Office with the goal of ''ensuring the right of Icelandic companies to use the word 'Iceland' in relation to their goods and services''.

The store group responded by sending a " high-level delegation" to Reykjavik in the hope of thawing relations with the Icelandic government.

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