Supermarket giant Tesco saw its share of the grocery market dip below 30% for the first time in nearly seven years as it struggled to compete with low-cost rivals, figures showed yesterday.
Tesco’s drop in 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, Britain’s biggest supermarket, saw its share fall to 29.9% in the 12 weeks to Jan 12, as it slashed prices in a failed bid to attract more customers.
The group admitted it had messed up its pricing strategy over a disappointing Christmas — triggering an unprecedented slump in its share price, wiping billions of pounds from its market value.
Britain’s top four supermarkets — Tesco, Asda, Sainsbury’s and Morrisons — were embroiled in an aggressive price war during the period, started by Tesco when it launched its £500 million Big Price Drop campaign in October.
Iceland saw its market share grow from 1.9% to 2.1% in the period, which is promising for potential buyers as bids for the chain are due today.
The chain’s founder, Malcolm Walker, is reportedly facing a battle with two private equity firms, BC Partners and Bain Capital, for the grocer in a £1bn (€1.2bn) auction.
Meanwhile, low-cost chains saw their shareof the market grow as well, with Lidl up from 2.4% to 2.5% and Aldi up from 3.1% to 3.5%.
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