{"id":38683,"date":"2025-04-10T11:36:53","date_gmt":"2025-04-10T11:36:53","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/04\/10\/price-war-sidelines-tesco-sainsburys-from-ftse-gains-analysts-back-tesco\/"},"modified":"2025-04-10T11:36:53","modified_gmt":"2025-04-10T11:36:53","slug":"price-war-sidelines-tesco-sainsburys-from-ftse-gains-analysts-back-tesco","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/04\/10\/price-war-sidelines-tesco-sainsburys-from-ftse-gains-analysts-back-tesco\/","title":{"rendered":"Price war sidelines Tesco, Sainsbury\u2019s from FTSE gains; analysts back Tesco"},"content":{"rendered":"
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European markets posted sharp gains on Thursday<\/a> after US President Donald Trump unexpectedly postponed a new round of tariffs on dozens of countries, including the European Union. <\/p>\n

The decision<\/a> sent relief rippling through financial markets, with the FTSE 100 surging by more than 4% to mark its biggest daily gain in months.<\/p>\n

However, the buoyant mood on London\u2019s blue-chip index was tempered by steep declines in supermarket shares. <\/p>\n

Tesco and Sainsbury\u2019s emerged as the day\u2019s biggest laggards, weighed down by mounting concerns over a deepening price war in the sector.<\/p>\n

Tesco warns of intense competition and falling profits<\/h2>\n

Tesco shares tumbled by 7%, or 24.4p, to 310.8p, their lowest level since July, after the retailer cautioned that profits would likely fall this year as it girds for battle in an increasingly cutthroat market. <\/p>\n

The company forecast operating profits between \u00a32.7 billion and \u00a33 billion for the current financial year, well below City expectations of around \u00a33.2 billion.<\/p>\n

Britain\u2019s largest grocer said it was preparing for an \u201cintense\u201d competitive environment and planned to maintain flexibility to defend its market share. <\/p>\n

Chief executive Ken Murphy highlighted Tesco\u2019s intention to continue investing in value for shoppers, even as inflationary pressures and rising operating costs bite.<\/p>\n

\u201cIn the last few months, we have seen a further increase in the competitive intensity of the UK market,\u201d the company noted in its outlook. <\/p>\n

\u201cWe are providing guidance that gives us flexibility and firepower to respond to current market conditions.\u201d<\/p>\n

Tesco\u2019s warning also dragged down shares in rival Sainsbury\u2019s, which fell by 5%, or 12p, to 223.8p.<\/p>\n

Asda\u2019s aggressive discounting adds to pressures<\/h2>\n

The price war fears have been fuelled by a renewed push from Asda, led by chairman Allan Leighton, who earlier this year unveiled the supermarket\u2019s largest round of price cuts in 25 years under its \u201cRollback\u201d campaign. <\/p>\n

This aggressive pricing strategy, aimed at fending off the rapid advance of discount chains Aldi and Lidl, is raising the stakes for established players.<\/p>\n

\u201cSupermarkets may be about to embark on a trade war of their own,\u201d said Richard Hunter, head of markets at Interactive Investor. \u201c<\/p>\n

“Asda\u2019s aggressive assault on prices, if it fully happens, will likely shave profits across the sector.\u201d<\/p>\n

Hunter noted that Tesco shares had already fallen by 10% this year before Thursday\u2019s trading, amid growing expectations and an uncertain economic backdrop. He cautioned that headwinds were set to persist.<\/p>\n

Despite the challenges, Tesco reported a 10.6% rise in adjusted operating profits for the previous financial year to \u00a33.128 billion, with group sales climbing 3.5% to \u00a363.64 billion. <\/p>\n

The retailer also increased its market share in the UK to 28.3%, its highest level since 2016.<\/p>\n

Looking ahead, Tesco said it was targeting cost savings of around \u00a3500 million to offset rising expenses, including a \u00a3235 million increase in National Insurance contributions.<\/p>\n

Analysts say Tesco still well placed despite risks<\/h2>\n

While investors reacted nervously to Tesco\u2019s cautious outlook, some analysts suggested the company remains well positioned to weather the storm. <\/p>\n

Aarin Chiekrie, equity analyst at Hargreaves Lansdown said, \u201c<\/strong>Fears of a price war that could squeeze profitability have weighed on sentiment across the sector recently, but it hasn\u2019t materialised yet.”<\/p>\n

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\u201cEven if a price war materialises, Tesco reckons it\u2019s in the most competitive position it\u2019s been in for many years, helped by the Aldi price match and Clubcard prices keeping customers loyal. And despite recent headlines, Asda doesn\u2019t appear to have the financial firepower to disrupt this dynamic.\u201d<\/p>\n<\/blockquote>\n

Echoing this view, Hunter added: \u201cThe upcoming battle is for Tesco to lose rather than Asda to win. The fact remains that the group\u2019s market share has risen yet again to 28.3%, which is equivalent to that of its nearest rivals, Sainsbury and Asda, combined.\u201d<\/p>\n

The post Price war sidelines Tesco, Sainsbury\u2019s from FTSE gains; analysts back Tesco<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

European markets posted sharp gains on Thursday after US President Donald Trump unexpectedly postponed a new round of tariffs on dozens of countries, including the European Union. The decision sent relief rippling through financial markets, with the FTSE 100 surging by more than 4% to mark its biggest daily gain in months. However, the buoyant <\/p>\n","protected":false},"author":1,"featured_media":38684,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-38683","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/38683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=38683"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/38683\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/38684"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=38683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=38683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=38683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}