Published On: Mon, Nov 10th, 2014

Sainsbury’s Must Shrink to Keep Up

Sainsburys

After seeing disappointing sales in the changing and competitive supermarket industry in Britain, Sainsbury’s is scrapping plans to expand its store count and might cut its dividend by as much a a third, reports the Telegraph.

The new CEO of Sainsbury’s Mike Coupe, has his work cut out for him, as he is faced with having to lower prices to keep up with discounters Aldi and Lidl. Coupe is expected to concentrate on aspects of the business that are strong, including is online, convenience store and clothing segments.

The stock has fallen 35% so far this year, and Coupe is having to cut costs. At the same time, food deflation has affected supermarkets, as well as cutthroat competition. It is likely that Sainsbury’s will open smaller stores, such as convenience stores.

Just for a bit of history, the iconic British supermarket chain was founded by John Benjamin Sainsbury, who married Mabel van den Bergh a Dutch Jewish heiress whose family made its fortune in margarine.

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