IT has been another tough week for the nation’s high-streets.

Last week, both Morrisons and Waitrose announced massive losses, whilst retail mogul, Sir Philip Green, passed on BHS to its new owners, Retail Acquisitions Ltd, for the asking price of a pound.

Worryingly, when it comes to food sales in particular, a recent study carried out by the British Retail Consortium and accountants KPMG, point to the fact that whilst the UK’s economic recovery takes hold, this renewed optimism seems to be by-passing the food retail sector altogether.

It seems that on-going price wars between the UK’s biggest supermarkets, Tesco, Asda, Sainsbury’s and Morrisons, have caused an undeniable change of fortune, which has sent grocery prices falling just as fast as their share of the market.

If you’re looking for evidence of this, then look no further than the supermarket chain, Morrisons, who last week announced their worst trading results in eight years.

The Bradford-based supermarket reported that profits were down on the previous year by more than half to £345m. After taking account of a £1.3bn write-down in the value of its supermarkets, that turns into an eye-watering loss of £792m.

Although their results make for painful reading, Morrisons are optimistic that their fortunes will improve with the appointment of incoming chief executive, David Potts.

It is widely hoped that Mr Potts will be able to revitalise the struggling business when he takes the helm on the 16th March. Before he gets there, Morrisons bosses have vowed to give him some financial wiggle room by slashing the future dividend payment.

Whatever Morrisons attempt to woo back customers and increase their profit-margins, one thing is certain – the Big Four supermarkets have collectively failed to keep up with the changing shopping habits of consumers.

When it comes to Morrisons, living in a by-gone era has clearly left them behind on the shelf.

They have long been criticised for being slow to move in setting up an online operation and its half-hearted venture into the convenience store sector was similarly underwhelming.

Margins in the supermarket sector are historically wafer-thin and falling revenues spurred by a price-war are causing an undeniable tectonic shift in the industry.

Ideally, dividend payments are supported by spare cash from earnings, which seems ever less plausible in this trading environment.

This downward trend has caused city analysts to estimate that the three major listed supermarkets, Morrisons, Tesco and J Sainsbury, will now need to close one in five stores to protect their profit margins.

Discounters Aldi and Lidl wised-up to the changing trends of smaller basket sizes and more frequent shopping at smaller convenience stores a long time ago.

The larger names in the sector have a good chance of rolling with the punches and developing their competitive advantages. But for now, market forces are in the driving-seat.

Samantha Dolby is an investment manager at Brewin Dolphin in Newcastle.

THE opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation which is subject to change.