Asda’s Price War Triggers £4 Billion Sell-Off of UK Grocers

Grocery Sector Faces Market Downturn Amid Price War

Over £4 billion has been erased from the valuation of the UK’s publicly traded supermarket chains following Asda’s announcement of a price war.

Shares in Tesco, Sainsbury’s, and Marks & Spencer experienced a decline as speculation intensified that they would be compelled to maintain low prices to counter customer defections to Asda.

This sell-off, initiated on Friday and persisting through Monday, occurred subsequent to Asda’s executive chairman, Allan Leighton, disclosing plans to invest millions in an effort to revitalize the company.

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Specific Market Impacts

• Tesco shares have decreased by 13 percent in the last two trading sessions, resulting in a £3.2 billion reduction in its market capitalization.
• Sainsbury’s, the second-largest supermarket in Britain, has incurred a loss of £540 million, equivalent to 9 percent.
• Marks & Spencer shares have similarly decreased by 9 percent since Friday, diminishing its market value by £660 million.

In total, the three companies have suffered a combined loss of £4.4 billion in just two days of trading. It is worth noting that Asda is privately owned and not listed on the stock exchange.

“Investors are anticipating a period of intense competition, which is likely to affect earnings, especially as it overlaps with upcoming payroll cost increases,” stated Susannah Streeter, head of money and markets at broker Hargreaves Lansdown.

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