Tesco consolidates dominant position as growth in grocery market slows

Tesco is consolidating its dominant position in a slow-growing Irish grocery sector, capturing a record 28.2% market share in the 12 weeks ending Jan 22.

Tesco’s 2.8% growth in the Irish grocery market — lifting its share from 27.5% a year ago to 28.2% — is against a background of negligible growth in the sector as reported in the latest grocery market figures from Kantar Worldpanel Ireland.

Kantar reports that the overall market is up just 0.2%, down from the 1% market growth posted following the strong Christmas trading period.

Commercial director at Kantar, David Berry, said: “Tesco is setting the pace among the big three grocery retailers in Ireland, posting growth of 2.8% and lifting its share from 27.5% a year ago to 28.2% now.

“This record high, which has been driven by the opening of new stores, is particularly pleasing for the retailer considering its recent drop in share of the British market. Customers now have more opportunities to shop with the company and this has helped the growth of Tesco’s share in the market,” he said.

Tesco saw its share of the British grocery market dip below 30% in January for the first time in almost seven years as it fought to compete with low-cost rivals, Kantar figures show.

Tesco’s drop in British market share, to its lowest level since May 2005, came as Sainsbury’s took its strongest hold on the market since March 2003 and Iceland soared to its best share of the market in 10 years.

Tesco remains Britain’s biggest supermarket but saw its market share fall to 29.9% in the 12 weeks to Jan 12 as it slashed prices in a failed bid to retain market share.

In the Irish market, Dunnes and SuperValu both continue to perform ahead of the market, seeing a slight increase in share to 23.4% and 20.1% respectively.

Mr Berry said: “Elsewhere, Aldi continues to post the highest growth rate among all retailers with sales growth of 26.2%. This is the 15th consecutive period that Aldi has grown by more than 20%, showing that shoppers remain convinced by its good-value offerings.”

Mr Berry said the gap between market growth and the 3.3% food inflation rate, down from 3.4% in the previous period, indicates that shoppers are continuing to cut back.

“Consumers are managing their budgets by shopping more frequently but buying less per trip. The cost of the average shopping basket is now down to just €23.61 from €24.78 for the same period last year,” he said.