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A fierce price war and battling to win back shoppers from discounters Aldi and Lidl has pushed supermarket sales below £100bn for the first time in six years.

Revenues and profits at the listed grocer has been eroded in the second quarter as Tesco, Morrisons and Sainsbury’s struggle to rebuild their top and bottom lines, according to a new report from The Share Centre.

Sales at the supermarkets sank 3.1% to £99bn in the past three months, dragging down the FTSE 350, which also fell 2.2% to £341.7bn in the period.

Operating profits for the top 350 companies surveyed also fell 3% to £27.1bn, mostly the result of weak commodity prices hitting mining giants. But Sainsbury’s, Tesco and Morrison all saw profitability decrease.

However, huge multi-billion writedowns which have plagued profits in recent times, including Tesco which was forced to wipe £5bn from its property values in 2015, have slowed. About £89.7bn was written down in the last quarter, the lowest level since 2008.

Helal Miah, investment research analyst at The Share Centre, warned of further profit erosion for businesses for retailer, housebuilders and travel firm if consumer confidence took a nosedive. “Profits in these sectors will be harder to come by in Brexit Britain,” he said.

“It has been a tough couple of years for UK plc, battling against global economic headwinds, and sector-specific problems that have beset commodities, energy, and food retailers.

“Supermarkets have had a particularly difficult time of it, facing intense price pressure and competition from discounters.”

However, he added the slump in the value of sterling should improve profits at listed businesses which report sales in US dollars and trade heavily overseas, such as SABMiller

The devaluation of the pound will boost the sterling value of any overseas business, whether via exports or from translating the value of overseas operations back into pounds.

“This is more than just accounting. For sterling investors, that will mean extra dividend income from those supercharged profits. This is mainly why the FTSE 100 has performed so well since the referendum,” Miah said.

Morning update

It’s a quiet start to the week on this August Monday morning, with little of note to flag on the London stock Exchange.

poultry processor Moy Park posts its second quarter update but the figures were released last week as part of parent JBS’ results, reported by The Grocer here. Revenues in the three months to 2 July rose 1.2% to £364.7m, with underlying sales up by 4.3%, thanks to “robust volum growth. Underlying EBITDA before exceptional items increased 13.4% to £33.5m and pre-tax profits doubled to £11.6m.

CEO Janet McCollum said: “The second quarter of 2016 has seen Moy Park continue its solid start to the year, delivering revenue growth and improving underlying profit before tax by 35%. This positive performance is set against the background of a particularly challenging market and our progress continues to be built on a platform of strong customer relationships, innovation, improved efficiency and cost control.

“We continue to build our business to the highest standards of food safety and quality, and to meet and exceed the ever-evolving expectations of our customers and consumers. This focus has resulted in yet another period of pleasing continued growth.”

The FTSE 100 has started the week well to get closer to 7,000 points, rising 0.3% this morning to 6,937.68 points. Ocado (OCDO) has climbed another 1% to 292.5p, PZ Cussons (PZC) is up 0.8% to 356p and Diageo (DGE) has moved up 0.5% to 2191.5p. Early fallers included Marks & Spencer (MKS), down 1.3% to 349.8p, WH Smith (SMWH), down 0.9% to 1598p, and Cranswick (CWK), down 0.8% to 2334p.

This week in the City

All eyes will be on Asda’s new CEO Sean Carke this week as parent company Walmart reports its second quarter results. The industry is waiting expectantly for the Asda to trigger another intensified front in the already brutal price war.

Nestle (NESN) will release its half-year results on Thursday, while Wednesday sees half year results from John Menzies (MNZS) and full-year figures from Treasury Wine Estates (TWE)

Elsewhere it is a quiet week in the City as summer rolls on, with the latets retail figurs due from the ONS and a trading update from tobacco giant Imperial Brands on Wednesday.

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