Deepdive Q1 2021:
UK supermarkets

Are the nation’s supermarkets a bargain in 2021 or are they past their sell-by date?

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Freetrade does not provide investment advice and individual investors should make their own decisions or seek independent advice. The value of investments can go up as well as down and you may receive back less than your original investment.

Report summary

On the surface, the pandemic set the stage for the UK’s supermarkets to clean up. But higher costs associated with staffing, safety and the expansion of delivery logistics reined in profits.
Competition is fierce and Tesco is still the runaway leader in terms of market share. The biggest losses in market share are among the biggest names. The largest gains are coming from the smallest competitors.
There’s a gap opening between the German discounters.
Long-term sectoral share price declines suggest structural inabilities to consistently generate returns on reinvested capital.
Non-core assets like banking divisions threaten to delay or disallow near-term progress.Long-term sectoral share price declines suggest structural inabilities to consistently generate returns on reinvested capital.

A bit about the author

Dan Lane

Dan Lane

Dan is Freetrade's senior analyst and author of the Honey daily emails and Weekend Read, along with David. Before Freetrade, Dan was senior investment writer at Fidelity International covering stocks, macroeconomics and investment strategy. His investment commentary is regularly featured in the likes of the Financial Times, the Telegraph and the Guardian. Catch up on Dan’s recent articles here and sign up for his take on the markets below.

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