The last time Tesco enjoyed 30% share in UK grocery sales was October 2013 [Kantar]. The same month the wheels came off the Tesco juggernaut: in its H1 results, profits slumped by almost 25% and sales fell in every single country in which it operated.
The rest, as they say, is history. After the ignominious departure of Philip Clarke, even the turnaround under Dave Lewis could not prevent Tesco’s share from falling (the 26.5% nadir was in August 2020), as the discounters devoured an ever-bigger piece of the grocery pie.
Since then, however, Tesco’s share has started to inch up again, through its continued turnaround and transformation, aided of course by the troubles of Asda and Morrisons. As of last month, share rose to 28.3%, its highest level since 2016, it announced at its annual results.
And now Tesco is targeting 30% again. A stretch target, clearly, and one it did not commit to officially on any of the PowerPoint presentations at this week’s IGD trade briefing – but a figure mentioned a number of times nonetheless, as three large screens were emblazoned with its vow ‘To Grow Faster’.
It’s quite brave to put the 30% figure out there. Even in a private setting. Tesco’s peak share was 31.6% in December 2007. At the time, Aldi’s share was 1.8% and Lidl was at 2.3%. Today their shares are 11% and 8% respectively. And with their store pipelines those figures will only grow.
Rivalry
That must mean Tesco views opportunities elsewhere. Look no further than big four rivals Asda and Morrisons. And the 30% figure puts a different complexion on the ‘profit warning’ Tesco issued in those same results last month.
Morrisons has at least stabilised its share, but Asda is still struggling to fix the leaky hole in its bucket. Still, it’s keeping up the pressure. Asda has upped promotional participation from 31% to 33% [Kantar]. And recording its 19th win this week, it’s now certain to win back the Grocer 33 crown (as Britain’s cheapest full service supermarket) it so carelessly lost to Tesco last year. But there’s rarely been a time when Asda and Tesco have grown at the same time. And the pie can’t get any bigger.
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