There’s bad news for the three biggest UK-listed supermarkets — Tesco, Morrison’s, and Sainsbury’s — Wednesday morning.
Tesco’s share price is down 2.55%, adding to the seemingly endless drop for the world’s second biggest retailer. It’s now down by more than 50% in the last year. Meanwhile, Morrison’s shares are down 4.46%, and Sainsbury’s shares are down 3.81% after some dreary results Wednesday morning. Though Asda holds a large share, it’s owned by Walmart, which is US-listed.
These numbers come after a trifecta of grim news Wednesday morning.
- Sainsbury’s announced that their like-for-like sales in the third quarter dropped 4.1%.
- The Financial Conduct Authority, the UK’s main financial watchdog, announced a “full investigation” into the Tesco’s suspicious £250 million in disappearing profit.
- The Groceries Code Adjudicator also announced that it wants Tesco to “examine its behaviour towards suppliers”. A close examination of the complicated accounting practices used by Tesco could cause an industry-wide knock-on effect.
“The shelves of worry continue to be stacked at the UK grocers and share prices are reflective with ugly downward trajectories,” according to Accendo Markets head of research Mike van Dulken.
There’s both the immediate threat that the dodgy accounting practices revealed by Tesco could be widespread and the existential threat to the business model itself. As Van Dulken puts it: “What does the future hold for the traditional ‘big shop’?”