Global market-research firm Euromonitor says that lower inflation is increasing pressure on the UK's big four grocery retailers and is now affecting their profit margins.
The comments follow on from British supermarket chain Sainsbury's reporting a sixth straight drop in quarterly same-store sales last week, with sales at stores open at least a year falling by 2.1 per cent, excluding fuel, in the 12 weeks to 6 June.
“Not much surprise there," commented Daniel Latev, research manager at Euromonitor International, on the supermarket's recent sales performance.
Earlier this month, Kantar released its quarterly figures, showing Sainsbury's market share has declined on a quarterly basis. "From the four big UK supermarkets, only Morrisons showed a marginal improvement, however, they are recovering from a really big decline," Latev stated.
Lower inflation – particularly in food prices – is increasing pressure on the big four grocery retailers "already under extreme pressure from smaller players" in the market – and particularly discounters, he explained.
"The price war is now starting to bite the profit margins of all of the big retailers which particulate, and it will be a war of attrition until Tesco decides to pull the brakes."
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