Discount stores feast on Tesco’s market share

TESCO’S market share has fallen to its lowest level in almost 10 years as the supermarket and its mid-market peers lose ground to hard discounters Aldi and Lidl.

Britain’s biggest supermarket, which announced plans earlier this month to win back shoppers by cutting prices, saw its market share decline to 28.7 per cent in the 12 weeks to 2 March, according to Kantar figures released yesterday.

Tesco’s share is down from 29.6 per cent in the same period last year and marks the lowest level of market share for Tesco since the end of 2004, when it stood at 28.9 per cent.

The firm hit a record 31.6 per cent in late 2007, during former boss Sir Terry Leahy’s reign.

“By being a very large organisation, everybody wants to have a bit of their business and the discounters have done a pretty good job off a relatively small base and with a very simple formula of cheap products and limited stock,” Kantar director Chris Longbottom told City A.M.

Morrisons, which will report its full-year results tomorrow, also saw its sales decline worsen in the last 12 weeks, down 3.2 per cent compared with the same period the year before. Its market share shrunk to 11.1 per cent from 11.8 per cent.

In contrast, German discounter Aldi’s sales growth rate accelerated to a record 33.5 per cent, giving it a market share of 4.3 per cent, while Lidl held on to the record 3.2 per cent share it reached last month.

Upmarket grocer Waitrose recorded its highest ever market share of five per cent while Sainsbury’s was once again the only one of the four major grocers to hold onto its 17 per cent share. Despite problems at the  Co-operative Bank taking their toll on the group, the mutual’s retail arm  has enjoyed its strongest performance in recent years with sales growth of 0.7 per cent and only a slight drop in share to 6.1 per cent.

Grocery inflation was 1.9 per cent –   its lowest level since 2010, providing some respite for shoppers.

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