Bloomberg News reports that both J Sainsbury and Safeway Plc lost business to Tesco and Wal-Mart’s Asda Group in the UK last year as consumers responded to low-price messages.
Sainsbury lost the equivalent of $90 million (US) in sales, while Safeway -- currently being pursued by as many as six companies in an acquisition frenzy -- lost a whopping $364 million (US) in sales to the other chains.
The Grocer, a UK trade magazine, recently did a market basket study that concluded that Asda was the lowest priced UK grocer, followed by William Morrison, Tesco, Sainsbury and Safeway.
Sainsbury lost the equivalent of $90 million (US) in sales, while Safeway -- currently being pursued by as many as six companies in an acquisition frenzy -- lost a whopping $364 million (US) in sales to the other chains.
The Grocer, a UK trade magazine, recently did a market basket study that concluded that Asda was the lowest priced UK grocer, followed by William Morrison, Tesco, Sainsbury and Safeway.
- KC's View:
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The question becomes how this price competition develops further depending on what entity ends up with Safeway.
One of the wisest people we know in this business suggested to us yesterday that it is likely that the company will end up being acquired by a financial entity, not another retailer, and then will be sold off in pieces. Seems like a sensible conclusion in that it maximizes shareholder value and probably minimizes the headaches suffered by the competition regulators in the UK.
