As one of the most experienced retail consultants in the country, Gordon Emslie has been in great demand lately commenting on a number of key developments in the UK retail industry. Here’s what he had to say in a recent article in The Scotsman newspaper about the impending supermarket price wars.
Gordon Emslie, a retail specialist at GNE Consultancy in Falkirk, said he expected a bitter price war to commence, but warned that shoppers were unlikely to see a return to the low supermarket prices of 2008.
“It is going to be a very competitive year for food retailing,” he said. “Tesco will have a lot of work to do to embed the price drop they have already done – the message from chief executive Philip Clarke yesterday was that that really hadn’t got through.
“Before Thursday, the boards of Sainsbury’s, Morrisons and Asda will have had an inkling of what was coming and they will either have a war chest ready to cover price cuts – or will have been looking at how they can maintain their market share.”
He added: “I think there will be some repositioning, but I don’t think we’ll see food prices revert to what they were three years ago – due to a high demand for commodities from the Middle East pushing costs higher.”
It is believed that in addition to lower prices, the superstores will also be forced to up their game in terms of customer service and the overall shopping experience, in a bid to win customers.
“Asda has won in terms of the price message – that is something they have been hammering home for some time,” said John Ibbotson, managing director of retail consultancy Retail Vision. “On the other hand, while people never see Sainsbury’s as cheap, they do see it as a good customer experience. Tesco is going to need to invest in its stores and also in things such as coupons, to draw customers back in. The other supermarkets will also need to make sure they stay in the game.”
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