Britain’s big grocers would never wage a full-out price war because, as Justin King pointed out, Mutually Assured Destruction is, well, MAD. Now he’s gone and there’s something close to war on the shelves. Last month alone, for example, the supermarket he used to run, Sainsbury’s, chopped 3 per cent off its prices, as measured by The Grocer magazine.

The reasons for this escalation of hostilities are familiar enough. The recession did for so many shops that Aldi and Lidl, having been marginal in the UK grocery business for many years, were presented with attractive sites just when shoppers were desperate to economise. Having discovered they could swap choice and comfort for lower prices and breezeblocks, they have proved highly resistant to returning to old loyalties.

The position today is described by the analysts at BESI as “a race to the bottom”, with food prices relative to retail prices at their weakest for a decade. It’s against this baleful background that Dave Lewis must decide his strategy for Tesco. Essentially, this comes down to finding capital by selling off a significant business, – say that in Thailand or Dunnhumby, its Clubcard information hub – or asking shareholders to subscribe for more shares.

The BESI boys believe that a relatively modest £2bn rights issue would allow Tesco to keep control of both. Technology ia driiving up the value of Dunnhumby’s vast database, while Thailand produces enviable cash flow in a market with attractive margins. Selling them would make Tesco less valuable in the long term.

The shares have already recovered to the point where they are pricing in better times, despite the lack of any prospect of them arriving soon. Mr Lewis comes from Unilever, a business where taking the long view is ingrained in the culture. His honeymoon will be short. He should fund Tesco for the long view while he can.


Easter quiz

Rory Cullinan left Royal Bank of Scotland because

a) He was exposed in The Sun Snapchatting his daughter about being in a boring meeting

b) He was photographed wearing a truly horrible brown spotty tie

c) He fell out with his colleagues after a month running the investment bank

d) He couldn’t stand the idea of playing the mad axeman at the Rapidly Shrinking Bank

Banks take holidays because

a) Their computers need a rest

b) To show us why we don’t need those branches

The best April Fool was

a) 103 (mostly) wealthy people complained about Labour’s tax plans

b) Royal Mint’s £5 coin offer for £5 (with free P&P)

c) The world’s best stock market performer in Q1 was Venezuela


Alternative liquid asset class

Phew, that’s a relief. The 2014 clarets will not be the vintage of the century, unlike the ’05s, ’09s and ’10s. Nobody really knows, of course, but noises from this week’s primeur-fest in Bordeaux suggest that the hype will give way to pressure for price cuts. Many trade buyers are stuffed with the last three years-worth, bought dearly and definitely not wines of the century.

The London merchants were sufficiently confident of their market clout to write an open letter in January suggesting that 2014 prices might look more like those in, say, 2008. Since they wrote, the euro has fallen further, offering scope for both sides to claim victory at lower dollar prices.

Today’s wine-making technology has effectively eliminated really poor vintages, and with it some of the guesswork for the buyers. The prices of even the top growths are looking soggy. An earlier wine of the century, Lafite Rothschild 2005, has nearly halved, according to Bordeaux Index. These wines are mostly bought by those trying to impress, with their employer’s money, or to sell on. Fortunately for the rest of us, the general standard of claret is far higher than it used to be, even if (sterling) prices are unlikely to fall back to 2008 levels.

This is my Financial Times column from Saturday (with apologies for late publication. I blame the incomprehensible iPad navigation.)