Glance over the long-term share price charts of the UK’s listed grocers, and it’s clear the only solid trade of the past decade was to buy WM Morrison in early 2021, before the private equity wagons started to circle.
I mention this not only as a gratuitous reminder of our bullish write-up of the grocer from February of that year, which was both on the money and lucky. Rather, the observation is intended as evidence that this most critical of economic sectors has made for a largely rubbish investment.
Over 10 years, Tesco's (TSCO) shares have posted a 2.8 per cent negative total return. Between 2013 and its delisting at the hands of acquirer Clayton, Dubilier & Rice, even Morrisons’ shares fell short of the FTSE All-Share’s compound return. Sainsbury’s (SBRY) 22 per cent total return over the same period probably bakes in some overegged optimism around its own potential takeover.