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Wednesday 17 September 2014

Tesco is the big loser as supermarket price war intensifies

Published 02/09/2014 | 02:30

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File photo dated 31/12/13 of customers with their shopping leaving a Tesco store, as the supermarket issued another warning on profits and said it will cut its half-year dividend for shareholders by 75%. New chief executive Dave Lewis will now join the company on Monday -  a month earlier than planned. PRESS ASSOCIATION Photo. Issue date: Friday August 29, 2014. See PA story CITY Tesco. Photo credit should read: Rui Vieira/PA Wire
Tesco: New chief executive Dave Lewis joined the company on Monday. Photo credit should read: Rui Vieira/PA Wire
Supermarkets' share
Supermarkets' share

Intense competition in the retail sector has seen prices fall and Tesco lose more market share.

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Tesco suffered a 5.5pc fall in its share of consumer spending in the past year, while Dunnes and SuperValu held sales broadly in line with last year.

Tesco saw its market share drop to 25.4pc in the 12 weeks to August 17 last. However, it can take some consolation from the fact that it improved its performance compared with last month when its sales fell by 6.2pc, according to the latest supermarket share figures from Kantar Worldpanel.

SuperValu is in second place with a market share of 25pc, with Dunnes recording a 21pc share of the grocery market.

Both Lidl and Aldi continue to perform ahead of the market with both retailers posting strong increases in market share. The research found that two thirds of shoppers say they walked through the doors of a Lidl over the last three months.

Lidl's share of the retail market is now 8.5pc, with Aldi's marginally behind it on 8.4pt.

The statistics also show food and drink prices rising at the lowest level since March 2012. Grocery price inflation now stands at 1.5pc, down from 1.9pc in the previous three months.

Commercial director at Kantar Worldpanel David Berry said: "The intense price competition between Ireland's larger grocers doesn't show any signs of letting up. This has led to falling prices across a number of staple food and drink items."

He said prices fell across popular products, with vegetables, bread and milk are now all cheaper than this time last year.

He said 46,000 more shoppers had shopped in Lidl over the last 12 weeks compared to a year earlier. "This increased footfall has helped to boost its share of the market to a record 8.5pc," he said.

Despite a slight slowdown in Aldi's sales growth which has dropped to 14.4pc, it is still growing ahead of the competition thanks to increased numbers of shoppers visiting the store more frequently and spending more per trip.

Both Dunnes and SuperValu have attracted more shoppers into their stores, by 41,000 and 60,000 respectively, however the challenge lies in enticing customers to up their in-store spend, Mr Berry said.

The fall in market share is one of the challenge confronting Tesco's new global chief executive Dave Lewis, who took charge yesterday.

Last week the supermarket group issued its third profit warning in eight months and slashed its dividend.

Irish Independent

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