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| Asda boss sees another tough year for food retailers in 2015 | Asda boss sees another tough year for food retailers in 2015 |
| (about 2 hours later) | |
| Asda's chief executive Andy Clarke has told the BBC he has never seen profitability fall so quickly in the UK supermarket sector. | Asda's chief executive Andy Clarke has told the BBC he has never seen profitability fall so quickly in the UK supermarket sector. |
| He says 2015 could be as challenging. | He says 2015 could be as challenging. |
| In an interview with BBC 5 live's Wake Up to Money, broadcast on Wednesday, he said discount grocers have had a striking impact on retailing. | In an interview with BBC 5 live's Wake Up to Money, broadcast on Wednesday, he said discount grocers have had a striking impact on retailing. |
| Analysts Kantar Worldpanel say Aldi and Lidl have reached a record combined market share of 8.6% of all shopping done at major UK grocery chains. | Analysts Kantar Worldpanel say Aldi and Lidl have reached a record combined market share of 8.6% of all shopping done at major UK grocery chains. |
| Their rise has come at the expense of the "Big Four" supermarkets, Tesco, Asda, Sainsbury's and Morrisons. | Their rise has come at the expense of the "Big Four" supermarkets, Tesco, Asda, Sainsbury's and Morrisons. |
| "The level of profitability decline in some retailers over the course of 2014 - we've never seen it before," said Mr Clarke. "It suggests 2015 is going to be equally as challenging." | "The level of profitability decline in some retailers over the course of 2014 - we've never seen it before," said Mr Clarke. "It suggests 2015 is going to be equally as challenging." |
| Although Asda has suffered less than rivals such as Tesco from the rise of the discounters, its market share fell 1% in the three months to December according to Kantar Worldpanel. | Although Asda has suffered less than rivals such as Tesco from the rise of the discounters, its market share fell 1% in the three months to December according to Kantar Worldpanel. |
| 'Unstoppable' | 'Unstoppable' |
| The discounters are planning to make bigger inroads into the UK this year. | The discounters are planning to make bigger inroads into the UK this year. |
| So confident are they that Danish discounter Netto is returning to the UK after a 14 year absence. | So confident are they that Danish discounter Netto is returning to the UK after a 14 year absence. |
| Interestingly, the company is being partnered by Sainsbury, in what some see as a "can't beat them, join them" move. | Interestingly, the company is being partnered by Sainsbury, in what some see as a "can't beat them, join them" move. |
| Established Aldi is on a major expansion drive, with plans to create 35,000 new jobs in the UK and to almost double its total number of stores to 1,000 by 2022. | Established Aldi is on a major expansion drive, with plans to create 35,000 new jobs in the UK and to almost double its total number of stores to 1,000 by 2022. |
| The former UK managing director of Aldi, Paul Foley, told Wake Up to Money the rise of the discounters was "unstoppable." | The former UK managing director of Aldi, Paul Foley, told Wake Up to Money the rise of the discounters was "unstoppable." |
| "The golden age of food retail profits by big, very successful, very well run businesses is over and discounters are the disrupters." | "The golden age of food retail profits by big, very successful, very well run businesses is over and discounters are the disrupters." |
| Mr Foley said the discounters were likely to grow to take a 20% market share. | Mr Foley said the discounters were likely to grow to take a 20% market share. |
| Morrisons has been hit hard by the rise of Aldi and Lidl. It reported a 6.3% fall in sales in the three months to November and a fall in half year profits of just over 30%. | Morrisons has been hit hard by the rise of Aldi and Lidl. It reported a 6.3% fall in sales in the three months to November and a fall in half year profits of just over 30%. |
| In October the supermarket responded with the launch of Match & More, a loyalty card that matches prices against Aldi and Lidl, as well as the Big Four. | In October the supermarket responded with the launch of Match & More, a loyalty card that matches prices against Aldi and Lidl, as well as the Big Four. |
| Morrisons' Group Marketing Director Nick Collard told Wake Up to Money that customer behaviour had "really changed". | Morrisons' Group Marketing Director Nick Collard told Wake Up to Money that customer behaviour had "really changed". |
| "The number one driver of store choice used to be convenience - it's absolutely now about price. | "The number one driver of store choice used to be convenience - it's absolutely now about price. |
| "We still have the same relative number of customers, they're just shopping slightly less frequently and buying slightly less." | "We still have the same relative number of customers, they're just shopping slightly less frequently and buying slightly less." |
| Worried | Worried |
| The bitter supermarket price war has forced the grocery market into deflation. According to the latest figures from the Office for National Statistics food prices have fallen by 1.7%. | The bitter supermarket price war has forced the grocery market into deflation. According to the latest figures from the Office for National Statistics food prices have fallen by 1.7%. |
| Kantar Worldpanel reported that the value of UK grocery sales fell for the first time in two decades in November. | Kantar Worldpanel reported that the value of UK grocery sales fell for the first time in two decades in November. |
| Supermarket expert and Loyalty Magazine editor Annich McIntosh, says the changes the industry is experiencing are profound. | Supermarket expert and Loyalty Magazine editor Annich McIntosh, says the changes the industry is experiencing are profound. |
| "This modern shopper is unlike any we've known before - a person with a mobile phone who can compare prices instantly. | "This modern shopper is unlike any we've known before - a person with a mobile phone who can compare prices instantly. |
| "There are a lot of very worried executives of food stores out there." | "There are a lot of very worried executives of food stores out there." |
| Global Research Director at analysts Planet Retail, Natalie Berg describes the rise of the discounters as part of "a perfect storm". | Global Research Director at analysts Planet Retail, Natalie Berg describes the rise of the discounters as part of "a perfect storm". |
| "I think there's been a real shift just in the past 18 months. | "I think there's been a real shift just in the past 18 months. |
| "Shoppers are generally more accepting of the discounters. They view it as a badge of honour and they're happy to shop those own brands" | "Shoppers are generally more accepting of the discounters. They view it as a badge of honour and they're happy to shop those own brands" |
| "On top of the shift in mindset the discounters have significantly upped their game." | "On top of the shift in mindset the discounters have significantly upped their game." |
| Growth | Growth |
| Despite the threats, Asda Chief Executive Andy Clarke sees grounds for optimism. | Despite the threats, Asda Chief Executive Andy Clarke sees grounds for optimism. |
| "Kwik Save had a place in this market for a good period of time and it disappeared from the landscape. | "Kwik Save had a place in this market for a good period of time and it disappeared from the landscape. |
| "I'm not suggesting that's going to be the case with the current discounters but they are a retail format that's been in this country for a good period of time." | "I'm not suggesting that's going to be the case with the current discounters but they are a retail format that's been in this country for a good period of time." |
| "They're a very different shopping experience. They've got roughly 10% of the product range of a superstore." | "They're a very different shopping experience. They've got roughly 10% of the product range of a superstore." |
| But Mr Clarke had this warning: "The discounters will grow and there will be winners and losers." | |
| Former Aldi UK boss Paul Foley is bullish about the German retailers' prospects. "The game's only half over." | Former Aldi UK boss Paul Foley is bullish about the German retailers' prospects. "The game's only half over." |
| Mark Price, the managing director of Waitrose, is also upbeat. | |
| The high-end supermarket has grown market share, and said discounters aren't having an impact on sales. | |
| Mr Price had this advice for Waitrose's rivals: "Be very clear with your customers what you stand for. | |
| "The ones that do that well will do extraordinarily well and they'll survive. The ones that do it less well will find the going tougher." | |
| Wake Up to Money is broadcast weekdays on BBC 5 live. You can sign up to the podcast via the 5 live website. | Wake Up to Money is broadcast weekdays on BBC 5 live. You can sign up to the podcast via the 5 live website. |