No-frills food traders are making the superstores very nervous. Peter Wilsher considers whether such fear if justified.
Britain's grocery bill this year will be somewhere in the region of £57 billion. Almost two-fifths of this now passes through the tills and checkouts of just three companies, Sainsbury, Tesco and Argyll (the parent of Safeway and Presto), which, for decades, have been steadily honing their management skills, slowly but inexorably improving their profit margins and extending their grip on the nation's housekeeping money. Throughout the recent recession they have continued to expand, refurbish and open new outlets, with an ever more dazzling and varied array of products and services. But suddenly doubts have set in. The stock market is awash with fears about capital spending, market saturation, the real, long-term value of all that glittering real estate, the impact of a new, fast-growing breed of deep-discount, no-frills food traders and, above all, about the possible outbreak of a cut-throat price war.