Saturday, 21 March 2009

UK’s retail big 4 keep growing

Retail gloom has not been affecting the biggest 4 retailers in the UK. Tesco, Asda, Morrisons and Sainbury’s all reported growth and increased profits for 2008, and even as the economic downturn increases in severity, the Big 4 continue to report growth with rising profits and new stores.

This picture is of the expansion of Sainsbury’s biggest store in Huddersfield which includes a bigger petrol station. Sainsbury’s reported half year profits of £272 million in October 2008, a rise of 13.3 per cent. Then, in March 2009 Sainsbury’s announced that it is buying 24 stores from the Co-operative Group, which will increase its retail estate by nearly 22,000 square metres. Morrisons is buying 38 stores from the Co-operative Group and reported £637 million annual profits to February 2009, a 13 per cent rise, and. Asda outperformed its sales and profit plans reporting a 6.5 per cent rise in full year sales for 2008, and reported growth in its market share to its highest ever level.

The UK’s biggest retailer is Tesco, and although some recent results, like its Christmas sales, were below expectations compared to its record profits of £2.8 billion announced in April 2008, growth plans continue. Tesco has lodged hundreds of planning applications for new stores, including for the sites of what were Woolworth’s and MFI stores before they went bust. But Tesco’s growth plan is not just for giant and expanding stores. Tesco is also honing in on smaller sites in town centres and is even targeting pubs, which are closing in droves, for turning into small stores, see article Tesco Planning for Monopoly. This could be the final straw for many of the UK’s struggling independent retailers.

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