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UK on verge of an "almighty price war" warns PLB's John Osborne

Published:  14 March, 2014

The UK retail industry is on the verge of an "almighty price war" amongst the major multiples as the rise of the hard discounters continues to dictate the dynamics of the UK grocery market, according to John Osborne the new managing director of wine distributor PLB.

Osborne believes the news this week that Morrisons has responded to the fact it has made losses this year by "investing next year's profits in price" will "spark an almighty price war" amongst the major grocers. 

"Senior people in the major grocery retailers are saying this is about as challenging as we have ever seen it," he explained. 

The market has already seen the grocers take big price cuts in areas such as milk and petrol and the beers, wines and spirits categories won't be too far behind, claimed Osborne.

"The big UK retailers can't just sit back and watch the discounters grow 30%," stressed Osborne. 

Whilst London and the South East lives in its own "bubble" of prosperity, 80% of the country is still struggling "massively to make ends meet".

"This is all going to lead to an absolute focus on price and cost - it has to - as retailers compete for market share and for consumers who are increasingly prepared to shop in smaller shops, more frequently and in different places.

"We are moving towards an even more challenging market place and the dynamics of the market are going to get tougher and tougher," said Osborne.

It also placed even more pressure on major suppliers like PLB to make sure they are running as efficient and as cost effective source to market, for all channels of the trade, as they possibly can whatever the trade dynamics it has to operate within.

The situation was likely to intensify further next week with the likely increase in duty which will be very hard to pass on to consumers in the current economic conditions, added Osborne.