Nevertheless, Tesco’s still not quite back on track. This time last year, it held 30.9% of the UK’s grocery spend, and its 4.2% year-on-year growth rate won’t settle CEO Philip Clarke’s nerves much, not when compared to the 8.3% growth demonstrated by Walmart-owned Asda over the same period. The jump was chiefly down to Asda’s acquisition of the 147-store-strong Netto chain but the figure will rattle a few cages over in Tesco towers nonetheless.
And it’s not just Asda beating Tesco in the growth stakes: Tesco has also been trumped by Sainsbury’s, which has seen a 5.4% year-on-year uptick on 2011, although its market share stays at 16.6%. Waitrose has had the best first quarter of the bunch (on organic growth): it has increased its share from 4.3% to 4.5%. Only Morrisons has seen a fall over the period, from 12.1% to 11.9%. This begs the question, where is all the new business coming from? Are indie retailers giving up yet more ground to the major multiples?
The growth spurt at John Lewis’s upmarket superstore is also an interesting phenomenon, given the squeezed spending on the high street. Edward Garner, Kantar Worldpanel director, says: ‘Waitrose sees no slowdown in its growth. This may be a result of cutbacks on eating out which have meant that some shoppers spend more money on bringing the dining out experience into the home.’
Perhaps Clarke needs to revise Tesco’s forthcoming strategy? Despite the failure of its ‘Big Price Drop’ campaign last year, the ongoing focus will still be on vouchers and special offers, albeit coupled with a £1bn retail revamp. Maybe a focus on Tesco Finest would be more to consumers’ taste?
Tesco may still be the UK’s largest grocer by a country mile but it’s the bear being harried by wolves. The worry is that these wolves are managing to rip off fair-sized chunks...