Asda Closes the Gap on Tesco

By Laura Elliott.

Walmart-owned retail chain Asda has begun to close the gap on the struggling supermarket giant Tesco. A report has revealed that Asda’s market share has hit a record level of 17.9% in the 12 weeks to March 18 – an increase from 17.3% a year ago. The data is from Kantar WorldPanel, and the increase has been attributed to the acquisition by Asda of 147 Netto stores and the impact of its price guarantee scheme, which offers to refund customers if their shop is not 10% cheaper than at its rivals.

Tesco has continued to be shaken by the failure of its £500m Big Price Drop. The current UK market leader’s share has fallen from 30.6% a year ago, to 30.2% currently. The fall, however, has been marginally less dramatic than those experienced earlier in the year.

The UK supermarket giant has also been put under additional pressure by the success of budget retail chains such as Aldi, Lidl and Iceland. Kantar director Edward Garner said that “The findings make particularly good reading for Asda. Its 17.9% share is an all-time record performance and its year-on-year growth rate of 7.8% is leading the big four, largely thanks to the full integration of its Netto stores.”

The supermarket price war has intensified in recent months, as Sainsbury’s has also launched its own Brand Match Guarantee scheme. Mr. Garner said that the schemes by Asda and Sainsbury’s had helped to “defuse” Tesco’s Big Price Drop. He added that “Even if people don’t redeem the Asda Price Guarantee, it has still put down a marker to say you can trust us on price.”

The Kantar WorldPanel survey has also found that the Co-operative’s sales have fallen by 2% recently, despite grocery market growth of 4%. This has fuelled speculation that the company is struggling to successfully integrate the 800 Somerfield stores it acquired in 2009.

Sainsbury’s and Morrisons have both held their share of the market at 16.6% and 12.3% respectively. Iceland’s sales have also grown by 10%, but German budget chain Aldi experienced the strongest growth, with sales up to 28.5%, bringing its share of the market to 2.6%.

The survey has also revealed that grocery price inflation has increased to 5.5% in the same period, with the growth of the market only 4%, as shoppers continue to take advantage of the increasing price offers to save themselves money.

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Posted by admin on Mar 31 2012. Filed under Europe, International, Interviews & Comments, Latest News, Retail News, Supermarkets. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry