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Tesco still faced by the spectre of price deflation

These bellwether results raised more questions than answers for the supermarket sector, even as the pandemic effect wears off
April 14, 2021

 

  • No significant easing in the ongoing price war with the likes of Aldi and Lidl
  • The group has maintained market share, but structural challenges remain in place

With a total share of 27 per cent of industry sales, and as the first of the big supermarkets to report its earnings this season, Tesco’s results were keenly anticipated as the market assesses whether the pandemic has been a net positive, or negative, for the whole sector - the answer isn't as immediately obvious as you might imagine. Tesco’s overall performance left the impression that the situation is under control, for now, but a flat dividend and worries over another sudden change in consumer spending habits provoked mixed reactions and the shares fell in an otherwise rising market.

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