Bloomberg News

Tesco Market Share Drops Below 30% for First Time Since 2005

January 31, 2012

Jan. 31 (Bloomberg) -- Tesco Plc’s share of the U.K. grocery market fell below 30 percent for the first time since 2005 this month as Britain’s biggest grocer struggled to fend off competitors’ increased promotions and fresh food offers.

The retailer’s market share in the 12 weeks through Jan. 22 declined to 29.9 percent from 30.5 percent in the same period a year earlier, researcher Kantar Worldpanel said today by e-mail. The figure was the lowest since May 2005. J Sainsbury Plc increased its share, while budget retailer Iceland Foods Ltd. had its strongest performance in 10 years, Kantar said.

Spending in Tesco stores climbed 2.1 percent in the 12-week period, half the pace of the wider supermarket industry, Kantar said. Tesco, based in Cheshunt, England, reported on Jan. 12 Christmas sales that missed analyst estimates and reined back profit expectations after competitors’ promotions proved more popular than its Big Price Drop campaign.

“There is considerable pressure on Tesco,” Kantar Worldpanel Director Edward Garner said in the e-mail. Sainsbury’s share of 16.7 percent, up from 16.6 percent a year earlier, means the London-based grocer has its “strongest hold of the market since March 2003,” he said.

Sainsbury is the U.K.’s third-largest food retailer behind Tesco and Wal-Mart Stores Inc.’s Asda, whose share of the market was unchanged at 17.5 percent, Kantar said.

Iceland Foods’ share increased to 2.1 percent from 1.9 percent a year earlier. Landsbanki Islands hf and Glitnir Bank hf, a failed Icelandic bank, are seeking to sell their combined 77 percent stake in the budget supermarket chain.

Discount grocers Aldi and Lidl increased their share of the market to 3.5 percent and 2.5 percent, respectively.

--Editors: Robert Valpuesta, Sara Marley.

To contact the reporter on this story: Paul Jarvis in London at

To contact the editor responsible for this story: Sara Marley at

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