Discount Supermarkets Share Rise, Tesco's Share Continues To Drop

Date : 05/22/2012 @ 7:19AM
Source : Dow Jones News
Stock : Wal-Mart Stores, Inc. (WMT)
Quote : 78.13  -0.18 (-0.23%) @ 7:14PM

Discount Supermarkets Share Rise, Tesco's Share Continues To Drop

Tesco (LSE:TSCO)
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Discount retailers Aldi and Lidl, as well as Asda saw their market share improve in the 12 weeks ended May 13 as cash-strapped consumers sought cheaper goods to make their money go further.

Meanwhile, the former darling of the retail sector, Tesco PLC's (TSCO.LN) share continued to fall, according to the latest data from Kantar, which monitors the grocery purchasing habits of 25,000 demographically representative U.K. households.

Asda, a subsidiary of Wal-Mart Stores Inc. (WMT), saw its U.K. market share rise to 17.4%, from 16.9% in the 12 weeks ended May 15, 2011. Including Netto, which it bought in April last year, Asda's total market share slipped to 17.4%, from 17.5%.

Upmarket retailer Waitrose also saw its market share rise to 4.5%, from 4.4% while discount retailers Aldi and Lidl's joint market share rose to 5.6%, from 4.9%. Separately, Aldi share rose to 2.8% from 2.3%--an all-time record--and Lidl's share rose to 2.8%, from 2.6%.

Edward Garner, director at Kantar Worldpanel, said the ongoing strong performances of Aldi and Lidl have led some commentators to believe consumers are deserting conventional stores for the discount sector but he believes a more realistic picture of shopper behavior shows that many consumers are continuing to do their main shopping trip in their usual store, but spending the remainder of their household budget on the discounters.

"The stubbornly high level of food price inflation means that shoppers continue to feel the squeeze on their household budgets", Garner concluded.

Tesco's market share fell to 30.8% compared with 31.1% a year earlier, while J Sainsbury PLC's (SBRY.LN) market share remained unchanged at 16.5%. Wm Morrison Supermarkets PLC's (MRW.LN) market share fell to 11.9%, from 12.1%.

Earlier this year, Tesco issued its first profit warning in 20 years citing the most difficult conditions for retailers in living memory. Since that time, however, the retailer has instigated a new round of price cuts and announced a GBP1 billion revamp of its stores.

Regarding future sales, Garner said that figures for the four weeks up to May 15, 2011 were boosted by the Royal Wedding and Easter offering a hint of what is to come over the Queen's Diamond Jubilee weekend.

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; ian.walker@dowjones.com

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