Retail news round-up on January 11, 2016: Asda to invest £500m in price cuts, Sainsbury’s to double Netto stores and Joules has strong Christmas.
Asda to invest further £500m into price war
Asda is to inject another £500m into cutting prices in its stores, firing this year’s first salvo in the escalating ferocious supermarket price war.
The UK arm of Walmart said the latest price-cutting investment comes in addition to its previously promised £1bn spend in price cuts.
Chief executive Andy Clarke has warned of another brutal year for the struggling British supermarkets.
“There is currently no growth in the food market and the rise of the discounters means that we must take radical action to win back our customers. We expect that 2016 will be another year of intense pressure at a macroeconomic level, in addition to sales remaining under strain from price deflation, a continued competitive background throughout the sector, and radically changing customer shopping habits,” said Clarke.
Sainsbury's plans to open another 10 Netto stores in UK
The grocer has confirmed filing 10 planning applications for the new outlets of its budget chain in the north of England.
The move would boost the Netto store count to 25 from the current 15 in the country.
A Sainsbury’s spokesman said: “Netto is on track to open 15 stores by the end of this financial year. No decision has been made on future openings, however, we continue to review potential opportunities. It’s early days but we are learning a lot about the important discount market and customers are responding well."
Joules reports storming Christmas as sales jump
Fashion and lifestyle retailer Joules reported a storming Christmas, with sales soaring despite poor weather.
Sales over the six weeks to January 3 surged 11.3% over last year, thanks to 12 new store openings and the re-launch of the brand’s website in September.
Heavy rain in the past few weeks helped in lifting sales of its wellies, with scarves and ponchos also selling well. The company recorded a strong online performance.
The owner and founder Tom Joule said: “We’ve invested a lot in fast turnarounds. We look at things slightly differently to the market and offer clothes for now – to be worn today.”
He also revealed that a stock market flotation could be on the cards – though not for at least a few years.