Tesco tips scales as nation's top grocer

A quiet revolution has taken place in the shires and suburbs of Britain. Sainsbury's, long the nation's favourite grocer, has lost its position as the UK's number one to Tesco, a former "pile it high and sell it cheap" merchant that a few years ago would not have known its rocket lettuce from its iceberg.

Figures released yesterday show that Tesco, led by the golf-loving Sir Ian MacLaurin, has surged through the £10bn market for the first time. Not content with that, the company is taking the battle further into Sainsbury territory by opening 25 more stores this year, creating 4,000 jobs.

Tesco credits its loyalty card, launched in February, for some of its gains. Other factors have included the gradual stealing of Sainsbury's clothes by offering the Sainsbury-style combination of quality, value and service. David Sainsbury, paternal employer and former Social Democratic Party bankroller, must be crying into his fromage frais.

A backlash is expected as Sainsbury retaliates to protect its coveted position as grocer par excellence. As one industry expert said: "Sainsbury's has to do something. It can't just sit there."

Sainsbury shrugged off the dent to its corporate ego yesterday, saying statistics could be made to say many things. "It's our aim to be the best rather than the biggest. These figures are just for packaged groceries. Sainsbury is still the largest greengrocer, butcher and wine merchant."

Other figures show the rivals neck and neck in the battle of the wire baskets. Sainsbury say it depends whose figures you believe and which measurements you choose to use.

While Sainsbury has dabbled in other areas, such as buying the Texas DIY chain in January, Tesco has stuck to what it knows best. It has developed new formats such as the smaller Tesco Metro outlets in city centres which cater for office workers seeking a lunchtime sandwich or a ready-made meal for one.

Tesco is also testing a petrol station and convenience store format called Express. The first two opened last May and a further 10 will be added this year.

4,000 new jobs, page 32