For the first time in at least 10 years, Tesco, Asda, Sainsbury’s and Morrisons are all losing market share
November 20, 2013 Leave a comment
New landscape for ‘big four’ supermarkets
For the first time in at least 10 years, Tesco, Asda, Sainsbury’s and Morrisons are all losing market share
11:47PM GMT 19 Nov 2013
Britain’s supermarket industry has entered a new era. For the first time in at least 10 years, Tesco, Asda, Sainsbury’s and Morrisons are all losing market share, according to Kantar. This is not just a statistical anomaly, it is a reflection that the supermarket industry has become ex-growth. There are straightforward reasons for this. Between the 1950s and 2008, grocery retailers rushed to open new self-service stores and then out-of-town supermarkets across the country.The likes of Tesco and Sainsbury’s grabbed sales from local corner shops and created a new model, using their size to drive down prices with suppliers. It became a virtuous circle for the retailers and customers, where greater sales meant greater investment in prices and new stores across the country.
However, today there are no postcodes in the UK without a modern supermarket. The internet and convenience stores have also given consumers more choice, meaning many families now choose to shop at a variety of stores rather then conduct one weekly shop. Even Justin King, who has presided over 35 consecutive quarters of increased like-for-like sales, bemoans the fact that Sainsbury’s shoppers are “promiscuous”.
This is a challenge for the “big four” because, as Archie Norman, the former chief executive of Asda, has said: “There is no inherent reason why selling food should be a growth business.”
The leading grocery retailers are, in many ways, facing a similar challenge to the pharmaceutical industry.
After growth in the 20th century on the back of major innovations, GlaxoSmithKline and AstraZeneca are now finding it more difficult to develop new products and their previous discoveries are being copied by cheaper rivals.
For Tesco, and its chief executive Philip Clarke in particular, its size is more of a curse than a blessing when judging its performance in the market share data.
Its market share of 29.8pc, compared with Sainsbury’s 16.8pc, is partly a reflection of the number of stores it opened, compared with its rivals in the 1990s and early 2000s.
So, today, with customers now able to shop with anyone thanks to the internet and Tesco slowing down its store opening programme, Mr Clarke has little hope of protecting that share, let alone growing it. After all, is Tesco really almost twice as good at selling food as Sainsbury’s?
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