Two very different snapshots of current trading conditions from two very familiar British retailers, Tesco and Woolworths, emerged today, writes Charlotte Moore.
Other retailers have been squealing about the impact of the recent slowdown in consumer spending but Tesco remains icily immune from such despair. Its sales, in the most recent quarter, rose by 4.5% reflecting strong growth in its international sales and steady growth in the UK.
In stark contrast, Woolworths' sales shrunk further, declining by nearly 7% in the 19 weeks to June 10. And it doesn't see the outlook getting markedly better. "We anticipate that the retail environment will continue to be challenging," the company said today.
Look more closely at the numbers and the situation at Woolworths is even more desperate with sales falling as excess stock positions are unwound.
Admittedly Woolworths never makes any profits in the first half of year - they are always notched up in the second six months of the year, but the question has to be asked - why would consumers choose to shop at Woolworths rather than Tesco?
With Tesco's inexorable expansion into the non-food arena it seems increasingly likely that shoppers will pick up their kids' clothes and DVDs along with the chicken breasts and the disposable barbecue.
Tesco currently accounts for £1 out of every £7.40 spent on Britain's high streets.
But before Woolworths is written off completely, bear in mind that Icelandic investors own around 10% of the equity. The company still generates strong cash flows and this, along with the speculative interest provided the Icelandic stake, may keep the share price bobbing along.
