Tesco's share of the supermarket trade has slipped to 29.7%, its lowest level for almost seven years. Britain's biggest retailer has seen shoppers increasingly defect to upmarket rivals as well as discount specialists such as Aldi and Lidl.
Tesco remains Britain's leading supermarket, taking £7.53bn at UK checkouts for the 12 weeks to 20 February – almost 70% more than closest competitor, Asda – but it lost ground to a range of smaller players which have a stronger focus on either value ranges or premium quality.
In January, its market share dipped below 30% for the first time since 2005 after a particularly poor Christmas trading period. Industry figures, compiled by the market research firm Kantar, confirmed the setback a fortnight after Tesco issued a shock profits warning that wiped some £5bn from the value of shares. The chief executive, Philip Clarke, admitted the group had been outmanoeuvred over Christmas, particularly on money-off coupon marketing in the UK. He added that Tesco also had deeper, "long-standing business issues" to address.
A Tesco spokesman pointed out the latest market share data had not fully captured a step-up in sales performance over the last month, during which time Tesco had introduced competing coupon offers. These included a £5-off voucher for two shops of more than £40, and a 10p per litre petrol discount for shoppers spending £60 or more in store.
On Monday, Tesco announced another departure at the top of its British operations, with marketing director Carolyn Bradley leaving the UK board to take up a new role of group brand director. She is the second UK board director to go this month and she follows Bob Robbins, who effectively served as deputy to UK chief executive Richard Brasher. In both cases Tesco has insisted the shift from UK operations to newly created roles at group level do not amount to demotions.
Bradley is to be replaced by David Wood, the commercial director in Hungary who has previous marketing experience with Unilever and Kraft. Meanwhile, Robbins is to be replaced by seasoned Tesco executive Chris Bush, who is returning from a role running operations in Thailand.
"I am sure you will join me in wishing Carolyn and David every success in their new roles," said Brasher in a message to staff. "I know you will agree that these moves will better equip the business to make life better for our customers."
Latest Kantar figures show that discount specialists Aldi and Lidl as well as value-focused frozen food store Iceland all recorded double-digit percentage rises in till receipts. Aldi led the pack, posting a 23.5% jump in sales to £920m helped by a store opening programme.
At the other end of the price spectrum, there were share gains also for Waitrose and Sainsbury's. The former saw its share rise to a record 4.5%, up from 4.4% a year ago, while the latter edged up from 16.5% to 16.6%. Walmart-owned Asda, which completed its acquisition of the UK operations of Danish discount supermarket Netto last year, recorded a share of 17.5%.
Edward Garner, director at Kantar Worldpanel, said: "[Waitrose's] continuing strong performance shows that it is a mistake to talk about the 'average' UK shopper. Some consumers clearly value good service and in-store experience when shopping, which Waitrose claims to provide.
"At the same time, the 'two nations' phenomenon continues as value for money remains paramount for many shoppers, with Aldi, Lidl and Iceland all enjoying double-digit growth as they hold on to record shares."
Overall, Kantar figures showed supermarket sales were continuing to expand at rate of about 4.5%. "While [this] remains lower than grocery price inflation – currently at 5% – the gap between the two measures is narrowing, meaning pressure on household budgets, while still strong, is not getting any worse."
Source ; http://www.guardian.co.uk
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