Low margins will be the 'new normal' for supermarkets, says leading retail professor.

Morrisons results spur warnings from retail experts

Morrisons has experienced its worst pre-tax profit report in eight years, with results down 52 per cent on last, culminating in £345 million.

The result has now spurred a warning from leading retail experts, who suggest that such results could become the ‘new normal’ for supermarkets competing in today’s market.

Professor Heiner Evanschitzky, professor and chair of marketing at Aston Business School, believes that supermarkets must now get used to these kind of results, and adapt accordingly.

“The discount retailers like Aldi and Lidl have fundamentally disrupted the market and the Big Four – Tesco, Morrisons, Asda and Sainsburys – must accept they’re losing market share.

“The best option for them now is to shrink their businesses gracefully.”

Evanshitzky also believes the recent Morrison results are unsurprising, ‘considering their campaign of price-slashing.’

“More worrying is the fact that sales have dropped – something you would hope to avoid when slashing prices,” he added. “It’s fair to say that their strategy of price-slashing has failed. This is a clear example of how not to save a supermarket brand.”

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