nickshanagher

Retail analyst Dave McCarthy says that the big four UK grocers are planning to add 5 million square feet of extra selling space each year in the next four, increasing total floor space by more than 20 per cent by the end of 2014. Are shoppers going to be spending 20 per cent more? Not likely. So what will the impact be? "It is inevitable that the big four will be going head to head more than at any time in history, with consequences for sales, profits and returns," says Mr McCarthy. At first look, independent retailers may think this is terrible news. But that assumes that the 75 per cent market share of the big four can grow. The other side of the coin is that the big four have already reached the maximum share that they can reach and each new square foot of selling space will impact on their own profitability. Two stories from local retailers this week bear consideration. Navin Bupthani assured me that a large Tesco Express near his shop was missing its numbers and fe...

In an article for Retail Express last week assessing Morrisons plans to open three convenience stores next year, I recounted a short walk that I took up Clapham High Street earlier this month, passing by a Sainsbury's Local, then a Tesco Express, then a Sainsbury supermarket. It is clear that these stores must put pressure on local shops. But also on each other. This week, the Financial Times is running a series of features to celebrate Terry Leahy's achievements at Tesco. The first feature includes the following observation from City analyst Dave McCarthy who says he cannot see how Tesco can continue to open 2 million square feet of new selling space a year without "significant cannibalisation" of its own sales. At the same time, Mr McCarthy says there is no "soft underbelly" to competitors to help feed Tesco's opening programme. Local shops, as the Kantar Worldpanel figures show, are holding their own. At least those that are investing in their...