Tesco challenged by rivals in UK

Supermarket giant Tesco faced stiff competition in the UK as its closest rivals increased their market share over the festive and New Year period, figures revealed today.

Wal-Mart owned Asda and Sainsbury both kicked off the New Year with a hike in market share, according to data from research group TNS Worldpanel.

Asda sealed its position in second place with a market share of 16.8%, up from 16.6% the previous year and up on figures from December 2006, when it was also 16.6%.

The gap between Asda and Sainsbury in third place widened after a encouraging market share surge from Sainsbury at the end of last year, which saw just two percentage points between them.

Sainsbury’s market share is now three percentage points below Asda despite a rise from 16.4% to 16.5% in the latest figures.

Tesco, meanwhile, maintained its lead with a 31.5% market share, up 8% on the previous year.

Morrisons also remained stable in fourth position on the grocery ranking, with a market share of 11%, just slightly down on the 11.1% it held the year before.

The New Year sales figures show supermarkets across the board enjoyed a bumper start to 2007, with sales up 5% to £20.2bn (€30.6bn) in the 12 weeks to January 28 compared to the previous year.

TNS director of research Edward Garner said: “The latest figures show that the buoyant market seen over the Christmas period carries into the New Year.”

The strong figures from TNS come just days after the British Retail Consortium (BRC) released its January statistics, which showed a like-for-like sales increase of 3.1% on 2006, largely driven by the grocery sector, according to the BRC.

But ailing low cost supermarket Kwik Save failed to benefit from the festive and New Year sales boom as its troubles compounded, losing further market share, dropping from 1.5% to just 0.2%.

The group, which was spun out of Somerfield last February, is reportedly on the bring of being sold in a rescue deal.