Tuesday 31 January 2012 7:55 pm

Tesco’s slice of market shrinks

SUPERMARKET giant Tesco has seen its market share fall under 30 per cent for the first time in almost seven years as it struggled to recover from its dire Christmas trading performance, according to new data from Kantar Worldpanel. Tesco’s market share – based on a measure of how much money has gone through its tills­ – has slipped from 30.5 per cent to 29.9 in the 12 weeks to 12 January, compared with a year ago. The news came as rival Sainsbury grew its market share to 16.7 per cent – its highest level since March 2003. Iceland also marked its best share in 10 years at 2.1 per cent, thanks to a revival in frozen food during straitened times, Kantar said. Asda’s conversion of its Netto stores acquired last year has led to an all-time record performance, lifting the retailer’s market share to 17.5 per cent from 16.9 per cent a year ago. Edward Garner of Kantar said the poor figure from Tesco – while still Britain’s second largest grocer­ – was important in that it had fallen under the “psychologically important” thirty per cent mark. Sales at Tesco, which yesterday completed a £450m sale-and-leaseback deal related to 11 of its UK stores, have dropped 2.1 per cent compared with a 4.2 per cent increase in the broader grocery market. Garner said this was caused by its “self-imposed deflation”, introduced with its Price Drop campaign in November. Tesco has lost out to low-cost rivals including Aldi and Lidl, which have increased sales by 19.7 and 11.7 per cent respectively. Meanwhile, grocery inflation fell from its peak of 6.2 per cent reported in November last year to 5.7 per cent in the period.