The supermarket squeeze on the way - and the tax breaks you just lost

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 5 May 2017

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

Shoppers have enjoyed cheap prices off the back of a supermarket price war, but alarm bells were sounded in Sainsbury’s results this week, showing how cost inflation is squeezing its profits.

How long is it before supermarkets give up trying to cushion the blow for households and price rises hit?

Simon Lambert, Lee Boyce and Georgie Frost look at what next for our shopping bills and how the big supermarkets are doing, in this week’s This is Money podcast.

But how much do we really care about those big chains? It’s independent shops that we say we love and the team also take a look at whether the High Street is changing for the better or worse.

Also on this week’s show, we reveal the tax breaks that you just lost as the Government quietly dropped plans to let you earn a bit tax-free on the side.

There’s also a look at why 4G mobile is so shonky, rip-off bank charges and whether the house of 0% credit cards will come crashing down.

And finally, if you’ve got a parking ticket recently we explain how to beat it… and also why you might be getting more of them.

Each week, the This is Money podcast brings you everything you need to know about money and what it means for you. Give it a listen, subscribe if you like it, and please leave us a rating or comment.

Transcript

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0:00.0	Sharing ideas about money, making the pound in your pocket go a little bit further.
0:10.7	Share Radio Morning with Georgie Frost.
0:20.3	A very warm welcome to This Is Money Show. I'm Georgie Frost and in the studio with me is editor Simon Lambert and Consumer Affairs Editor Lee Boyce.
0:28.0	To round up the week's top stories they've been covering on their award-winning website.
0:31.9	And this week we focus on business from the big supermarkets to the micro-entrepreneurs.
0:39.2	And for once, it's not all about Brexit. It's been bad news for Sainsbury, knitters and curry houses, good news for hairdressers
0:45.7	and Peru. But let's land closer to home and heads to the supermarkets first, where the falling
0:50.2	value of the pound, stiff competition, rising inflation and savvier shoppers look
0:55.0	to be spelling more trouble for the sector. We've got some rather bad numbers out this week
0:58.6	from Sainsbury. Profits were down at 8% and they reckon costs will continue to rise, a sign
1:03.9	of a wider problem, Richard Perks, is retail analysts at Mintel.
1:08.4	You've got the fundamental problem here that supermarkets, superstores, are losing
1:11.8	market share. For Sainsbury's, there's a small offset there in the fact that convenience is
1:16.6	doing better and their non-foods are doing better clothing in particular. You've got a bonus from
1:22.7	Argos, but of course you've got the shares issued to buy Argos. And then there are all sorts of
1:27.7	exceptional items which go into the number. The underlying story is that profits are under pressure
1:32.5	at the superstores, and that's going to continue to be the case. I think the fundamental problem
1:37.0	for all of the superstores, all the major retailers, is that there is a shift of population back
1:42.7	into inner cities, and those people are shopping much more on an as-needs basis they're not going to the superstore anymore.
1:50.0	And that I think is going to be a fact of life for all of them, really for the foreseeable future.
1:56.0	Jamesbury's bought the Home Retail Group which includes the Argos and Habitat brands for £1.4 billion last year.
2:02.6	These figures were the first to show whether that was a good idea, and it seems, well, it might be.
	...

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