Tesco battered as market share hits seven-year low

Rivals Sainsbury's and Asda the big winners from supermarket giant's latest woes

Tesco's share of the UK grocery market has fallen to its lowest level in nearly seven years, landing another blow on its chief executive, Philip Clarke, during his first year at the helm.

The retail giant issued its first profit warning in 20 years last month, and saw its market share fall by 0.6 per cent to 29.9 per cent over the 12 weeks to 22 January, according to the closely watched Kantar Worldpanel data.

This was the first time since May 2005 that Tesco's market share had fallen below 30 per cent, when it was at 29.7 per cent.

Asda and Sainsbury's appear to have gained most from Tesco's UK woes. Marks & Spencer, Waitrose, Aldi and Lidl have also powered ahead, as spending has become polarised between discounters and the more premium grocers.

Clive Black, the analyst at Shore Capital, said: "When you are the size of Tesco and you have a bump, then everyone is going to feed off that."

Mr Clarke, a Tesco lifer who became chief executive in March 2011, admitted the chain had made a series of errors, such as not issuing enough coupons, before Christmas. This contributed to a 2.3 per cent fall in its UK like-for-like sales over the six weeks to 7 January.

But it was Tesco's decision to invest £400m in 2012-13 improving its UK stores that led to its first profit warning since the early 1990s.

Ed Garner, a director at Kantar Worldpanel, said there is "considerable pressure on Tesco", adding that its growth of 2.1 per cent over the 12 weeks was only half the market average of4.2 per cent.

Asda grew its sales by 8.2 per cent over the 12 weeks to give it a market share of 17.5 per cent.

Sainsbury's has also gained ground on Tesco – which overtook it in 1995 to become the UK's biggest supermarket – and posted sales growth of 5 per cent. This helped Sainsbury's to grow its market share by 0.1 per cent to 16.7 per cent, maintaining its highest figure since March 2003.

But Morrisons has been less bouncy recently, with its sales growing below the market at 3.7 per cent over the 12 weeks. Its market share slipped by 0.1 per cent to 12.3 per cent.

Iceland Foods, the up-for-sale frozen food retailer, continued its strong recent performance, growing sales by 11.3 per cent. The private equity firms BC Partners and Bain Capital are thought to have submitted final-round bids of up to £1.5bn yesterday.

The Kantar data is the latest headache for Mr Clarke. In addition to a string of departures among his top team, Bob Robbins, Tesco's UK chief operating officer, sold more than £200,000 of shares in the supermarket a week before its first profit warning, although Tesco said he did nothing wrong.

The group, which has operations in 14 countries including China and the US, is still expected to grow profits to £3.6bn for the year ending in February.

Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links