After years of food price deflation, the growth of online and the rise of the discounters, the big four are suddenly in serious danger of stabilising.
It’s a word that would have seemed almost unfathomable 24 months ago, but the mainstream supermarkets are quickly building a real sense of solidity, strength and sales momentum.
Morrisons, dismissed by many as the grocer that would suffer more pain than any of its competitors in the squeezed middle of the market, has epitomised the wider fightback.
And David Potts, its unassuming, straight-talking boss – similarly written off by some observers as a retailer, a trader, but not a strategist – is also proving plenty of people wrong.
When the former Tesco executive took the reins in March last year, it would not have been too much of an exaggeration to label Morrisons a basket case.
Performance in the first half of 2014/15 – details of which were unveiled just four days before Potts took charge – was nothing short of grim.
Pre-tax profits nosedived 52% to £345m, while like-for-likes tumbled 5.9%. It was a retailer in crisis.
Merely 20 months on, Morrisons is celebrating four consecutive quarters of like-for-like growth, success in newly-refreshed stores, steady improvements in online sales, a burgeoning supply deal with Amazon, growing shopper numbers and its best ever Halloween performance.
Tesco, Potts’ former paymaster, is gaining similar trading momentum of its own.
UK like-for-like sales rose 0.6% in the first half of its current financial year, volumes and transactions climbed and it is going on the offensive in a bid to rebuild group margins to between 3.5% and 4%.
The market leader’s stance on proposed price hikes against supply giant Unilever will have also done Lewis’s bid to reclaim Tesco’s “consumers’ champion” crown no harm whatsoever.
Sainsbury’s may have produced fewer fireworks in terms of like-for-like performance, but its £1.4bn acquisition of Argos owner Home Retail Group was as fearless as it was forward-thinking, creating a solid foundation for future growth.
Under Mike Coupe, it has arguably become grocery’s multichannel leader, but that has not stopped it pressing ahead with efforts to create the “supermarket of the future” and keep footfall flourishing.
“With three of the big four now operating from much sturdier bases, attention must turn to building from those.”
Luke Tugby, Retail Week
Even Asda, the big four’s undisputed wooden spoon winner this year, has reasons to be optimistic under new boss Sean Clarke and a refreshed senior team, including chief operating officer Roger Burnley and chief customer officer Andy Murray.
Following an eye-watering 7.5% slump in second quarter like-for-likes, prices are being slashed thanks to the deep pockets of its parent Walmart while availability is gradually improving and stores are being revamped in an effort to win back disillusioned shoppers.
But despite improving performance across the board, stability is just the beginning.
With three of the big four now operating from much sturdier bases, attention must turn to building from those.
As Potts quite rightly summed it up today, “there is plenty to do.”