More than £4billion has been wiped off the value of Britain’s listed grocers after Asda launched a supermarket price war.
Shares in Tesco, Sainsbury’s and Marks & Spencer slid as speculation mounted that they will be forced to keep prices low to stop customers flocking back to Asda.
The sell-off – which started on Friday and continued yesterday – came after Asda’s executive chairman Allan Leighton said he will spend millions in a bid to turn the company around.
Tesco shares have fallen 13 per cent in the past two sessions – reducing its value by £3.2billion. Sainsbury’s, Britian’s second largest supermarket behind Tesco, has lost £540million, or 9 per cent.
And M&S shares are also down 9 per cent since Friday – knocking £660million off its market value. It means the trio has lost £4.4billion in just two days of trading. Asda, however, is owned by private equity and is not listed on the stock market.
‘Shareholders are expecting a period of intense competition, which is likely to hit profits, especially as it coincides with upcoming payroll cost increases,’ said Susannah Streeter, head of money and markets at broker Hargreaves Lansdown.
Price war: Asda’s executive chairman Allan Leighton (pictured) said he will spend millions in a bid to turn the company around
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