Daily Research News Online no. 6421 - Tesco Consolidates UK Lead, Unveils US Plans

Tesco Consolidates UK Lead, Unveils US Plans

February 8 2007

Supermarket giant Tesco grew its UK sales by 8% and its share to 31.5% in the 12 weeks to 28th January, but is seeing 'solid' competition from Asda, Sainsbury and Morrisons, according to TNS Worldpanel data. Meanwhile Tesco says it will open small 'neighbourhood markets' in the fall in twenty locations around Phoenix, AZ.

In the UK, both Asda and Sainsbury continue to grow, with share increases to 16.8% and 16.5% respectively and Morrisons remains stable with sales increase of 4% over the last year.

Edward Garner, Worldpanel's Director of Research, says buoyant Christmas sales have carried over into the New year, with grocery retailers continuing to enjoy 5% sales growth vs 12 months previously. Both Asda and Sainsbury continue to grow, with share increases to 16.8% and 16.5% respectively and Morrisons has stabilised after gobbling up Safeway, with sales increase of 4% over the last year. Both Waitrose and Iceland post robust figures with Waitrose riding high on current ethical trading and healthy eating trends. Aldi and Lidl are also still benefitting from the effective collapse of Kwik Save.

TNS Worldpanel monitors the household grocery purchasing habits of 25,000 demographically representative households in Great Britain. The above data is based on the value of items bought. Worldpanel coverage extends to more than 50 countries worldwide. TNS is online at www.tns-global.com .

In the US, Tesco will offer consumers 'Fresh & Easy Neighborhood Market' shopping in twenty stores in the greater Phoenix area this autumn, with stores planned in Las Vegas, Los Angeles and San Diego. The smaller format store, around 10,000-square-foot, aims to 'capitalize on what its sophisticated market research shows to be a hankering for a return to the days of the neighborhood store' according to www.freshplaza.com . The format is loosely based on Tesco's 1,000+ Express stores in the UK and six other countries.

The site quotes Tim Mason, CEO of Fresh & Easy Neighborhood Market and Tesco West, who says the Phoenix stores are 'intentionally smaller than the usual supermarket' in order to get customers in and out faster and easier, and that the approach is designed 'to draw customers back to their local neighborhoods by offering high-quality, fresh and nutritious food at affordable prices'.

Tesco, which has more than 2,800 stores and 370,000 employees worldwide, already has a US headquarters in El Segundo, CA, employing 150 and has many leases in California and other locations, having 'circled the U.S. for 20 years deciding on the right format for success', according to Mason.