Britain’s biggest retailer Tesco loses most market share in 14 years as discounters Aldi and Lidl grab shoppers from leading grocery chains
New data from Kantar Worldpanel shows that in the 12 weeks to May 25 Tesco’s sales fell 3.1pc year-on-year. This led to its share of spending in the grocery industry contracting from 30.5pc to 29pc, the biggest decline in its share for 14 years.
Sales for the total grocery industry grew by just 1.7pc year-on-year, the lowest level for at least 11 years.
David McCarthy, analyst at HSBC, said the figures were “shocking” and suggest the number of visits by shoppers to Tesco stores is falling by more than 1m every week.
The pressure on Britain’s biggest supermarket chains is intensifying as the impact of price cuts deflates revenues and the discounters Aldi and Lidl grab more shoppers.
The figures show sales falling for Tesco and Morrisons, with Sainsbury’s and Asda the best-performing major grocery retailers.
However, while sales for the “big four” stagnate, the German discount chains are expanding rapidly. Aldi grew sales by 35.9pc while Lidl grew 22.7pc. Waitrose, the upmarket grocer, grew sales by 6.1pc.
The Kantar data has been released ahead of Tesco’s first quarter trading update on Wednesday, which is expected to show the retailer’s worst sales performance for decades.
Tesco still remains Britain’s biggest retailer by a significant margin ahead of Asda, Sainsbury’s and Morrisons.
Morrisons sales declined by 3.9pc year-on-year in the 12-week period, with Sainsbury’s up 0.9pc.
Asda, the Leeds-based chain, was the only one of the “big four” to perform ahead of the market. It grew sales 2.4pc and its market share expanded from 17pc to 17.1pc.
Mr McCarthy said: “The market is in danger of getting desensitised to bad figures from the quoted three [Tesco, Sainsbury’s and Morrisons], but this would be a mistake.
“These figures from Kantar are shocking, in our view, and show that Tesco’s and Morrisons’ total sales are going backwards, despite huge capital and P&L investment.
“Morrisons data suggests like-for-like stores are experiencing 800,000 fewer customer visits per week, and Tesco looks like it is experiencing more than 1m fewer customer visits per week on a like-for-like basis (we assume average expenditure of £25 per lost visit).”
Bruno Monteyne, analyst at Bernstein, said the sales decline suggested the outlook for Tesco is worsening.
He added: “Tesco has failed to adapt to the change in competition from space race to distinct-offer competition.
“By raising prices faster than anybody else, we think Tesco has lost its differentiation, giving a free ride to the targeted retailers at both ends of the spectrum, value & quality.
“The ‘accelerated’ strategy is unconvincing: it is still trying to be everything to everybody and the only thing that has accelerated are market share losses.
“Internationally it remains overly centralised. Concerns about the quality of the earnings and accounting principles pose a risk of further write-downs or profit resets.”