Tesco sees first market share dip in seven years
01 February 2012 09:57
Tesco has seen its share of the grocery market dip below 30% for the first time in nearly seven years as it struggled to compete with low-cost rivals in the sector, figures showed today.
Tesco's drop in market share, to its lowest level since May 2005, came as Sainsbury's took its strongest hold on the market since March 2003 and Iceland rose to its best share of the market in 10 years.
Tesco saw its share fall to 29.9% in the 12 weeks to January 12th, as it slashed prices in a failed bid to attract more customers.
The UK's top four supermarkets - Tesco, Asda, Sainsbury's and Morrisons - were embroiled in an aggressive war during the period, started by Tesco when it launched its £500 million Big Price Drop campaign in early October.
Iceland saw its market share grow from 1.9% to 2.1% in the period, which is promising for potential buyers as bids for the chain are due today.
The supermarket's founder, Malcolm Walker, is reportedly facing a battle with two private equity firms, BC Partners and Bain Capital, for the grocer in a £1 billion auction.
Meanwhile, low-cost chains saw their share of the market grow as well, with Lidl up from 2.4% to 2.5% and Aldi up from 3.1% to 3.5%.
Asda, second biggest UK grocer, put in a record performance, lifting its share from 16.9% a year ago to 17.5%, however this was boosted by the completion of its conversion of the Netto stores it acquired last year.
Sainsbury's, which saw its share grow slightly from 16.6% to 16.7%, had a robust Christmas, reporting a 2.1% increase in like-for-like sales excluding fuel but including VAT in the 14 weeks to January 7.
The third biggest supermarket pledged to extend its price-matching scheme after the successful festive trading period.
This contrasts the disappointment at Tesco, where chief executive Philip Clarke said the supermarket wrongly pulled back on one-off promotions, such as meal deals and buy one, get one free offers, as its rivals increased them.
Retail news is updated every weekday and is provided courtesy of: 
