Goldman Sachs is warning mainstream UK supermarket operators that they must shut one in five locations in order to restore the sector’s profit growth, which has taken a heavy hit in recent years as more discount chains move in. The report singles out Tesco as the hardest hit of the UK’s leading food retailers, which also includes Sainsbury’s and Morrisons. Sainsbury’s recently reported a GBP 290m loss for H1, which has the retailer mulling whether to put plans to open an additional 40 locations on hold. Goldman Sachs is predicting the UK’s top supermarket chains will suffer a 3-percent like-for-like sales decrease until 2020 unless they fix their business strategy, which focused too much on profitability in the past, allowing “discounters to get too strong.”
