Five reasons why network closes stores

Total network sales continue to grow in harsh environmentwith a grocery supermarket chain increasing its market share from 5.3% last year, an average of more than 250,000 people a week walked through its doors.

Hundreds of network jobs you may retailer six closing the store

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But the prestige shop is closing stores and curbing expansion after operating profit decreased by 10.5% to $ 121.3 m in the six months to the end of July, even up to £ 25 million write down of real estate, where he no longer wants to build stores.

His “big four” supermarket rivals – tesco, Sainsbury’s, Asda and Morrisons – has pushed through restructuring plans in an increasingly competitive environment and the growth of online shopping.

So why is the network to close the branches?

1. Perenashivanie

Staines, leeks, Cardiff is not a typical network the heartlands and did not attract a lot of customers necessary to become profitable. Rising costs and concern that shoppers will rein in their spending once in a quarter and a month working in the high inflation in just such adventures less attractive.

Buyers are also moving away from the big weekly shop on the way picking up what they need, so locally sales in big supermarkets, usually in the doldrums. The network continues to open stores this year, but mostly they are his small chain of convenience points section of the market that continues to grow.

Most circuits are supermarkets. When Dave Lewis took in 2014 of the prosecution of Tesco, one of his first decisions was to close 43 unprofitable stores, and abandon plans to build 49 more across the country.

2. Prices

The growing popularity of discounters aldi and lidl has forced the whole food market to review prices and waitrose were not insured. Even the mostly middle-class shoppers are happy to pick up a bargain in one of the German discounters, whether champagne or a roll of toilet paper – and that was devoured in waitrose market.

In an attempt to remain competitive, the network agrees to price-match Tesco, the UK largest supermarket chain on thousands of branded lines. As tesco has led to lower prices, the network was forced to follow, contributing to a 1% drop in sales at established stores in six months in July.

Other initiatives, including the introduction of the Essentials range during the financial crisis in 2009 and a 20% discount for owners of discount cards for 10 items they regularly buy and profits will be squeezed. Analysts wonder how long he will be able to continue to offer them free coffee when they pop in to make their purchase.

3. Online

Network more rich London buyers were interested followers of online trading. Online grocery sales increased over six months by 4.3% to July, as sales in established stores fell. Picking and packing of customers ‘ products is an expensive business. While the network shoppers spend more than other circuits and profitable, it makes far less money online than in stores. In the struggle that the economy of online grocery business folded is illustrated by the supermarket, which took 15 years to make a profit.

4. Rising costs

Last month Charlie Mayfield, Chairman of the shopping for the parent group, John Lewis partnership, warned that retailers will be forced to cover most of the higher prices of imported goods because of the falling value of the pound sterling after the UK voted to leave the EU.

That only adds to higher costs from the introduction of the new minimum wage for over-25S, a national minimum wage and a new tax of discipleship, which comes into force in April. This year growth rates have an impact on the network more than many of its competitors, especially as it affected businesses in the South, where the chain mostly. The company claims that its new management structure in the stores will improve the quality of service, providing the right amount of employees working during peak hours.

5. Increased competition

It is not just the rise of aldi and lidl, which has affected supermarkets. One of his largest competitors, marks and Spencer, has also seen rapid development in recent years, opening hundreds of stores just food.

Those who want to be pampered or are concerned about ethical food, there are a number of other options from organic vegetables boxes for premium ranges of the main supermarkets.

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