Supermarket property goes to waste as shares drop

Sainsbury’s have announced a pre-tax loss of 290GBP, following warnings that sales in supermarkets are likely to continue falling for the next few years. The supermarket chain has had to scrap plans to build new shops across the country.
The new chief executive of Sainsbury’s, Mike Coupe, described the price war and the ongoing struggles of the grocery market as a ‘once-in-a-generation’ change.
In the 28 weeks leading to 27 September, Sainsbury’s fell into the red, and subsequently experienced a drop of 5 per cent in the value of their shares.
The retailer said that only 3 quarters of its stores are located correctly and are of the right size in order to maximise profit and deliver the best service.
This indicates that approximately 100 stores across the UK are inadequate and that there were big faults with the organisation, building and long term forecasts of these stores when they were built.
“As a result of the review of our supermarket estate we have impaired a number of our trading stores and have also decided to withdraw from a number of schemes in our property pipeline that are unlikely to achieve an appropriate return on capital,” the store said.
It may take a while for this ‘once-in-a-generation’ change to die down and see our supermarkets return to their previous efficiency. Hopefully when they do, they will have learned from their mistakes and try to keep the market more sustainable, so that, for their own sakes and the sakes of their employees, they don’t have to indulge in another price war.