Just two weeks after Tesco posted a disastrous loss of £6.4bn, today it's turn of Sainsbury's to be the bearer of predictable bad news. The supermarket's performance wasn't quite so bad as its rival's though – it made a statutory loss of £72m in the year to 14 March, down from an £898m profit in the previous 12 months, and the first time it has sunk into the red since 2005.
As with Tesco, this decline was largely thanks to massive property writedowns - £900m in Sainsbury's case – but neither supermarket can take too much heart from its operational performance either. Sainsbury's underlying pre-tax profits were down 14.7% to £681m and its like-for-like sales, excluding fuel, were down 1.9%.
Its chief exec Mike Coupe was trying to seem positive though. 'The underlying profits of the company...are actually still there,' he said. 'Although they've fallen a bit year-on-year, our share of the overall industry profits has actually increased, and increased quite significantly.'
The big property write down is evocative of the 'kitchen-sinking' Tesco was accused of - throwing out all of the bad news in one go. Nobody is expecting the 'Big Four' supermarkets to be doing well at the moment, so their management teams are probably hoping to use this as an opportunity to put a bad year behind them, and focus on growth.
They all still have a lot of work to do though. As the latest data from Kantar Worldpanel, released today, demonstrates, the middle ground isn't the best place to be at the moment. Aldi's sales were up 15.1% in the 12 weeks to 27 April and Lidl's were up 10%. Though its growth has slowed, upmarket Waitrose was up 1.5%, compared to a decline in revenues for all the mid-market grocers in the same period.
'Sainsbury’s has become the retail world’s squeezed middle,' said Paul Thomas of retail consultancy Retail Remedy. 'What began as gentle pressure from both above and below has quickly morphed into an alarming exodus of customers – sending the brand spinning into a full-blown identity crisis.
'With its high-end customers – who have long formed its bedrock – increasingly trading up to the on-form Waitrose and M&S, and its more price-conscious shoppers being lured away by tough price competition, Sainsbury’s proposition is suddenly looking less unique.'
So what can Coupe do to get the supermarket's mojo back? 'We've made a lot of progress on our strategy – we've invested £150m in the prices of the products that we sell, and we're seeing that reflected in the sales volumes of those products,' he said. 'We've also started on the road of improving the quality of 3,000 products.' For instance they've improved the biscuit base of Coupe's 'favourite' cheesecake, which will surely drag hordes of customers back through the doors.
Sainsbury's is also investing in convenience stores and digital technology, but in reality there's only so much Coupe, Tesco's Dave Lewis et al. can do to keep shoppers coming in. They've been hit by the pincer movement of discount retailers and shoppers turning away from big box stores, both systemic changes that are unlikely to be reversed. No matter what they do in the short term, all of the 'Big Four' have a rocky road ahead.