First Tesco announced it was cutting its store-opening programme down to a bare minimum of convenience and dark stores. Then Morrisons scrapped its ambitious store-opening plans to replace it with a similar focus, though only on convenience, and now, Sainsbury’s has announced a material curtailing of its supermarket development programme.

These proclamations reflect a collapse of demand for the British superstore groups over a sustained period; the industry is coping with flat volumes for the fourth year in a row. That weak demand reflects pressured shoppers, who are wasting less, shopping more frequently, buying in a more disciplined manner and eating out more.

It shows the concept of the hypermarket as the one-stop all-category ‘El Dorado’ to be fundamentally flawed.

” Collective myopia has allowed the LADS to seize an opportunity”

However, it has also to be said that the trading strategies of the big four focused on protecting their own gross margins, not their customers’ needs.

This collective myopia allowed competitors, particularly the LADs, to seize an opportunity. Sainsbury’s now speaks of a central view of the LADs gaining c.1% UK market share per annum for the foreseeable future.

Of course, the LADs have ambitious store opening programmes that they are seeing through. Premium players such as M&S and Waitrose, as well as specialists, have also been wide awake as the big four slept at the wheel and they have displayed the confidence to open new outlets.

While so, the retrenchment of the big four, particularly with respect to large stores, will make a difference to industry capacity. With potentially strong economic and population growth in the UK, a situation may arise whereby industry sales densities rise again, even with growth in penetration online, which shareholders would welcome for sure.

However, ahead of such a day there is the small matter of Asda, Morrisons and Tesco competing with the LADs, which could be bloody. Additionally, being old sceptics, we also harbour a cynicism about supermarkets and their ability not to over-invest when times improve. Only time will tell whether Philip Clarke’s space race proclamation is as profound as it sounds.

Dr Clive Black is head of research at Shore Capital

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