City AM in the UK reports that analysts there are suggesting that "supermarkets need to dramatically scale down their store estates if they want to stop haemorrhaging sales and return to growth … In a research note published yesterday, Goldman Sachs said Sainsbury’s, Tesco and Morrisons must cut space by around 20 per cent by 2020 in order to survive in today’s tough retail landscape, where discounters Aldi and Lidl are grabbing a greater share of the market and online shopping is proving ever-more popular."
The story notes that while all the four major supermarket chains are investing substantial sums in price cuts to compete with the discounters,but that analysts believe that this will be enough to achieve any sort of sustainable profitability.
The story notes that while all the four major supermarket chains are investing substantial sums in price cuts to compete with the discounters,but that analysts believe that this will be enough to achieve any sort of sustainable profitability.
- KC's View:
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At some level, I wonder if US retailers ought to be paying attention to what's going on in the UK, anticipating that the same thing easily could happen here. If many US retailers are equally vulnerable, maybe they ought to start thinking about how to get ready to deal with it now.
There's no such thing as the unassailable advantage. (That, you won't be surprised to learn, is rule # 30 in Retail Rules! 52 ways To Achieve Retail Success, my new book, available on Amazon.com.)
