1 In 5 Supermarkets To Close - Giant Squid

[John The Pessimist]

As per title. Following on from comments from Mike Coupe Sainsbury's new boss last week, stormy times ahead for the retailers.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11235652/Goldman-Sachs-Supermarket-groups-must-close-one-in-five-stores.html

[interestrateripoff]

Over-expanded and the growth model for probably most of this decade has been more stores, there's only so many fecking stores they can open.

[Wurzel Of Highbridge]

We have a 'Ghost COOP' down the road. Looks to me like on old Somerfield store, half the shelves are empty and even the long dated goods like cans of soup have reduced to clear labels making things from insanely over priced to overpriced.

That will be one of the first stores gone, why would you shop there when there's an ASDA around the corner.

[The Masked Tulip]

So many Tescos in Swansea that if one store does not have what you want it is just a 10 minute stroll to another one.

[frozen_out]

I wonder if this is the black swan. The supermarkets employ 10s of thousands directly and indirectly (hell, think of the impact on truck makers and their suppliers as hauliers scale back) and many thought they were bullet proof.

The Tesco event marks the start of great crash 2 IMO.

[Executive Sadman]

Yup. One local to me shelved...was the centrepiece of the local (pointless waste of money) 'regeneration plan'...so one wonders what will happen to that now.

http://www.huntspost.co.uk/news/latest-news/new_huntingdon_sainsbury_s_has_been_shelved_1_3845567

Not surprised...one in Ely (15/20 miles away) opened a couple of years back and is always empty...oddly enough, the Aldi opposite, which opened at the same time, with the pretty eastern european till girls - is always busy

[Ash4781]

From the article. Scary stuff.

As supermarkets close their stores one option is redevelop the sites into residential property, the analysts added.

However, this would lead to the food retailers having to write down the value of the sites by 35pc to 70pc because of the current value of supermarkets in their accounts.

This means that major store closures “would not be appealing to the retailers in the short term”.

Edited November 17, 2014 by Ash4781

[SNACR]

I have a suspicion that, from the recent population growth, more money went home via Western Union than into supermarket tills than was anticipated.

[winkie]

I have a suspicion that, from the recent population growth, more money went home via Western Union than into supermarket tills than was anticipated.

I think they over did it with the number of food stores they keep opening, but fell short with providing the number of new homes that growing populations require.

[Wurzel Of Highbridge]

I recall for the late 80's that our local ASDA in St.Austell, Cornwall was also some to many smaller shops. there was a hair dresser where my mother would get our hair cut and a pet shop, cant recall what the other small shops where.

It's always an option for these warehouse to sub let small stores within rather than close stores down and I suspect that's what will happen. They could shed staff via natural wastage especially since many are on zero hours contracts.

[durhamborn]

"The analysts set a price target of 155p for Tesco, implying another 19pc fall in its share price, and 155p for Sainsbury’s, implying another 42pc slump. Goldman predicted that shares in Morrisons could increase by 17pc because it has fewer stores than its rivals."

They had Morrisons as a sell until this morning.They were saying sell at £1.50.Now a buy up to 209p.

Two months ago they had Tesco and Sainsbury the strongest and Morrisons the weakest when it was obvious Morrisons balance sheet was the best placed to handle big price cuts.

Who pays these people for their great knowledge?.

I wouldnt buy Tesco at any price and probably not Sainsbury.

[stormymonday_2011]

This has been coming for some time.

Changing shopping patterns, pressure from foreign discounters, competition from online retailers, and above all less money in the pockets of consumers made it inevitable. You only have to consider that if shoppers were merely to reduce their food wastage rate by half (i.e to actually eat all that they buy rather than binning a fifth of it) then the big food retailers would immediately have a huge problem. Those vastly bloated out of town stores that once seemed unstoppable are now starting to look a liability particularly for the likes of Tesco who invested so heavily in that space. Given that these stores are huge employers albeit on the back of zero hours tax credit subsidised labour then one suspects the impact on the job market is going to be significant. The big 4 supermarket chains have over 1 million workers alone.

http://realbusiness.co.uk/article/25629-retail-is-britains-biggest-employer

Governments are going to have to come up with ever more improbable wheezes to make the unemployed disappear.

Edited November 17, 2014 by stormymonday_2011

[durhamborn]

I wonder if this is the black swan. The supermarkets employ 10s of thousands directly and indirectly (hell, think of the impact on truck makers and their suppliers as hauliers scale back) and many thought they were bullet proof.

The Tesco event marks the start of great crash 2 IMO.

Cummins Engines who build all of Leyland/DAF engines etc among others has seen its engine build drop from an average of 230 a day to 120.The last time it got anywhere near those terrible levels was 2007/8 just after the crash.

They tend to be a great signal for the end of the business cycle and those build rates are pointing to a huge downturn.

[Wurzel Of Highbridge]

Governments are going to have to come up with ever more improbable wheezes to make the unemployed disappear.

Food stamps and more food porn.

[weaker]

So many Tescos in Swansea that if one store does not have what you want it is just a 10 minute stroll to another one.

10 minutes? There are at least 4 "Tescos" within 10 minutes of my front door!

[chronyx]

Cummins Engines who build all of Leyland/DAF engines etc among others has seen its engine build drop from an average of 230 a day to 120.The last time it got anywhere near those terrible levels was 2007/8 just after the crash.

They tend to be a great signal for the end of the business cycle and those build rates are pointing to a huge downturn.

Interesting anecdote - cheers. Finger on the pulse type stuff!

[stormymonday_2011]

Being discussed on Newsnight now.

[stormymonday_2011]

Food stamps and more food porn.

Hmm. One does wonder if the established supermarkets might like some sort of benefit card that can only be used in their stores. Not sure it would fix all there problems though.

The Newsnight interviewees pretty much ran through the list of why supermarkets were under the cosh. The impact of online shopping on their high margin non food items was highlighted as one of the areas in which the huge out of town stores were particularly vulnerable.

[dances with sheeple]

I think they over did it with the number of food stores they keep opening, but fell short with providing the number of new homes that growing populations require.

Are you saying that people are living in the stores?

[repetitive bleats]

I'd like to spend more in supermarkets but between the landlord and the utilities companies there's not much left for food.

[sf-02]

I have a suspicion that, from the recent population growth, more money went home via Western Union than into supermarket tills than was anticipated.

Quite a few immigrants I know shop mainly in local shops selling specialist produce and less in big supermarkets. As the immigrant population grows so quickly could this be having an impact?

On a socialogical view, many groups are mainly shopping in 'their' shops which is another example of behaving differently from much of the UK population and living a more segregated life in a way - in my experience far more so than 'experts' predicted. Another example is many also only watch their 'own' TV via satellite and consume almost no UK media. More people than I'd like are almost entirely failing to engage with UK society or embrace UK values (though in terms of shopping I think they've got the right idea ditching tesco et al). Interestingly it continues into many second generation too.

Edited November 18, 2014 by sf-02

[dances with sheeple]

Quite a few immigrants I know shop mainly in local shops selling specialist produce and less in big supermarkets. As the immigrant population grows so quickly could this be having an impact?

On a socialogical view, many groups are mainly shopping in 'their' shops which is another example of behaving differently from much of the UK population and living a more segregated life in a way - in my experience far more so than 'experts' predicted. Another example is many also only watch their 'own' TV via satellite and consume almost no UK media. More people than I'd like are almost entirely failing to engage with UK society or embrace UK values (though in terms of shopping I think they've got the right idea ditching tesco et al). Interestingly it continues into many second generation too.

I think it is simply that the sheeple don`t have access to waves of credit any more, and the big four expanded too much. People don`t do massive booze and food runs now, throwing dvd`s, clothes,magazines and other unnecessary crap into the trolley like they used to, they carefully pick the best deals. Looks like you can`t bail out bust banks, prop up house prices and rents, cut interest rates to zero and have a booming economy at the same time. Who would have believed it?

[spyguy]

Sometimes it feels like the UK has spent the last 20 odd years investing in retail (supermarkets esp), Financial services and Banks. Oh, and housing. By 'invest' I mean spend money/debt.

Its looking more and more like the UK has seen a generation backing the wrong horse.

[macbeth79]

Quite a few immigrants I know shop mainly in local shops selling specialist produce and less in big supermarkets. As the immigrant population grows so quickly could this be having an impact?

On a socialogical view, many groups are mainly shopping in 'their' shops which is another example of behaving differently from much of the UK population and living a more segregated life in a way - in my experience far more so than 'experts' predicted. Another example is many also only watch their 'own' TV via satellite and consume almost no UK media. More people than I'd like are almost entirely failing to engage with UK society or embrace UK values (though in terms of shopping I think they've got the right idea ditching tesco et al). Interestingly it continues into many second generation too.

The eastern europeans are starting to embrace the same method as the asians, both in terms of food and media.

[winkie]

Quite a few immigrants I know shop mainly in local shops selling specialist produce and less in big supermarkets. As the immigrant population grows so quickly could this be having an impact?

On a socialogical view, many groups are mainly shopping in 'their' shops which is another example of behaving differently from much of the UK population and living a more segregated life in a way - in my experience far more so than 'experts' predicted. Another example is many also only watch their 'own' TV via satellite and consume almost no UK media. More people than I'd like are almost entirely failing to engage with UK society or embrace UK values (though in terms of shopping I think they've got the right idea ditching tesco et al). Interestingly it continues into many second generation too.

This is very true, new immigrants are excellent at making money go further, they shop in bulk in their own specialist stores, they import produce directly cutting out the middle men and the women are very proficient in cooking with less.....property and education are the priority investments and they try to avoid debt or the wrong kind of consumption debt.