FTSE 350 Review 2018 

FTSE 350: Food retailers ride the inflation wave

FTSE 350: Food retailers ride the inflation wave

Inflation has had painful consequences for much of the UK retail sector. Raising prices to offset cost inflation has the potential to alienate once-loyal customers. But, for the UK grocery sector, inflation has actually had positive consequences. The last recession gave rise to the German discounters – Aldi and Lidl – both of which encouraged a race to the bottom in terms of prices for the four main supermarkets, J Sainsbury (SBRY), Tesco (TSCO), Wm Morrison (MRW) and Asda. As per recent data from Kantar Worldpanel, the encroachment of the German brands continues: over the 12 weeks ended 31 December 2017, Aldi and Lidl were tied to be the nation’s fastest-growing supermarkets, both growing sales by 16.8 per cent year on year.

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