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Highlights
- Grocery prices in the UK rose by 1.3% in the last four weeks to 5 September 2021 due to a consistent rise in commodity prices and supply chain disruptions.
- As per the report by Kantar, the price rise was most significant in the cat foods, cakes and pastries and savoury snacks.
- Supermarket chains across the UK stayed away from the promotion and discount offers to overcome the inflation risk
Grocery prices in the UK domestic market rose by 1.3% in the four weeks to 5 September 2021, indicating a price rise in the daily essential products available at the supermarket due to a consistent rise in the commodity prices, increases in freight costs and supply chain disruptions due to shortage of heavy goods vehicle drivers.
According to market research firm Kantar, the price rise was most significant in the cat foods, cakes and pastries and savoury snacks, while vegetables, fresh bacon and ambient cooking sauces saw a drop in prices. Also, supermarket promotion hit a record low as supermarket chains across the UK stayed away from the promotion and discount offers to overcome the inflation risk. During the past month, only 27.5% of spending was done on deals.
Additionally, the market share of the online grocery sales also declined to 12.2%, the lowest level since May 2020 compared to the 13% share reported four weeks ago as more consumers begin to purchase in-store following ease in restrictions.
© 2021 Kalkine Media
Let us explore 3 FTSE listed supermarket chain stocks for maximum gain:
Tesco Plc (LON: TSCO)
The company operates the supermarket chain in different countries apart from the UK. It has the largest market share in the UK and operates around 7000 shops in the country. Besides supermarket chains it also provides banking and financial services.
The company continues to perform well, during the first quarter ended 29 May 2021, the company reported total retail sales of £ 13,362 million. Sales moved up by 0.2% over the 12-week period year-on-year.
The company could be impacted due to short term supply chain disruption. Still, it will overcome the disruption due to its leadership position in the UK market, also, higher retail sales and market share will protect the company’s profit margins.
Tesco Plc current market cap stands at £19,777.71 million as of 14 September 2021. In the last one year, the stock has given a 15.97% return to its shareholders.
J Sainsbury Plc (LON: SBRY)
FTSE100 listed company is the second-largest supermarket chain in the United Kingdom, which operates different categorise of stores like supermarkets, convenience stores, collection points and habitat stores.
The company reported a 1.6% rise in the total retail sales excluding fuel during the first quarter to 26 June 2021. The company continues to gain market share against its competitors. However, the company has been focusing on the deep discounting business model to gain market share, which needs to be altered as the company’s business model to provide deep discounting could impact the margin and profitability in upcoming quarters due to the rise in underlying raw material prices.
J Sainsbury Plc current market cap stands at £6,747.38 million as of 14 September 2021. In the last one year, the stock has given 56.76% returns to its shareholders.
Morrison Supermarket Plc (LON: MRW)
FTSE 250 listed company operates supermarket chain under the Morrisons brand name in the United Kingdom. It provides its services through in-store and online grocery websites.
The supermarket chain has been in the news for its takeover battle between two US-based private equity firms, which is currently led by the Clayton Dubilier & Rice LLC with its £ 7 billion bid for the company.
The company reported a total revenue rise of 3.7% to £9.05 billion in the interim result for the half-year ended 1 August 2021. However, the company in its report warned that the UK market is facing inflation due to higher raw material prices and higher freight charges.
Morrison Supermarket Plc current market cap stands at £7,050.16 million as of 14 September 2021. In the last one year, the stock has given 64.45% returns to its shareholders.
