Avoid supermarket stocks until they stop building new stores

By building more and more stores, supermarket chains are throwing good money after bad, says Phil Oakley. It's time they changed strategy.

Tesco's dreary trading statement (UK like-for-like-sales down 1.5%) shouldn't come as a huge surprise.

No one should expect sales to be roaring away at the moment. Its business model in the UK needs fixing at a time when its customers don't have much spare cash.

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Tesco446p300p-32.70%8.75.00%2.32
Sainsbury's559p289p-48.30%9.95.70%1.77
Morrisons297p280p-5.70%9.94.30%2.33

Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.