Tesco market share dips below 30 per cent

 

Supermarket giant Tesco saw its share of the grocery market dip below 30 per cent for the first time in nearly seven years as it struggled to compete with low-cost rivals, 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 soared to its best share of the market in 10 years.

Tesco, still the UK's biggest supermarket, saw its share fall to 29.9% in the 12 weeks to January 12, as it slashed prices in a failed bid to attract more customers.

The group admitted it had messed up its pricing strategy over a disappointing Christmas - triggering an unprecedented slump in its share price, wiping billions of pounds from its market value.

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 to 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.

The battle for Iceland will heat up in the next few weeks as Mr Walker is not expected to submit a bid ahead of today's deadline as existing shareholder agreements give him 42 days to match any existing offer.

The retailer is being sold off by creditors to Icelandic bank Landsbanki, the collapsed bank that took control of the chain in 2008. Iceland has boomed since the economic downturn as consumers consider frozen food as good value for money.

Meanwhile, Kantar Worldpanel, who produce the data, said grocery inflation was 5.7% for the 12-week period, another decrease from the peak of 6.2% reported for November last year.

PA

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Life and Style
Men with beards rejoice: Your beard probably doesn't harbour faeces-like bacteria
health
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
ebooks
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before