Tesco loses out in Christmas stakes

Feb 4 2009 by John Knighton, Huddersfield Daily Examiner

THE winners and losers in the Christmas grocery battle have been confirmed as figures revealed Asda and Morrisons gained market share at the expense of Tesco.

Sector heavyweight Tesco saw its slice of the grocery market drop from 31.2% to 30.7% in the 12 weeks to January 25 compared with the previous year.

The figures from industry researchers TNS Worldpanel follow the supermarket’s worst Christmas in almost 20 years, with like-for-like sales growth of just 2.5%.

TNS said the grocery market grew 6.4% despite shoppers cutting back elsewhere on the high street, but supermarkets felt the effects of consumers trading down to value ranges, with premium products under pressure.

This factor, according to TNS, contributed to Tesco’s share dropping, as its customers switched from Finest to Value and Tesco Discount brands.

The move towards value-for-money could also be seen as rivals Asda and Morrisons grew their shares from 16.9% to 17.2%, and 11.6% to 11.9% respectively, both “well ahead” of the market.

Asda has announced it will create 7,000 new jobs this year through new openings and expansions, while Morrisons saw like-to-like sales jump 8.2% over Christmas.

TNS Worldpanel’s research director Ed Garner said: “To a degree, they have not altered their central value-for-money proposition in the recession, it’s the market that has changed around them.”