Tesco is losing its market share to Aldi and Lidl, as well as to Waitrose, resulting in a loss of sales which is faster than any of its rivals.The research firm, Kantar Worldpanel, reported that the supermarket chain saw a decline in sales of 3.6% for the 12-week period to October 12. This has resulted in their market share dropping from 30.1% last year to 28.8%.
This comes after the HSBC analyst, David McCarthy, stating that it will be necessary for Tesco to invest £3bn to overcome its sluggish UK performance. He said they need to lower food prices by 5% to 6%, improve the quality of their products and increase their store numbers. He added that it may take the group around six years to address their current issues, but they can succeed and stand up to the discount stores.
Although the sales figures for Tesco declined over the past three months, this period has seen its best performance since June. According to the research data, Aldi and Lidl continue to increase their market share, with sales increasing by 27.3% and 18.1% respectively. However, Waitrose has also experienced a sharp 6.8% sales increase. Among the big four supermarkets, Asda was the only group to experience an increase in sales of 1% after it cut prices last year.
In sharp contrast, Sainsbury’s saw their sales decline by 3.1% and Morrisons saw a decline of 1.8%.
Kantar’s head of retail and consumer insight, Fraser McKevitt, said a clear polarization of the market is evident, with both the discount and premium ends of the market gaining share, whilst the mainstream supermarkets continue to be squashed and squeezed in the middle.
Tesco’s half-year reports are due on Thursday, along with an update on the results of its inquiry into the recent accounting scandal it suffered, which resulted in a £250m overstatement of expected profits.