Tesco under the cosh as smaller rivals close in

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Tesco is continuing to feel the heat from an expanding Asda as well as smaller low-cost rivals, according to industry data.

Market share at Britain’s biggest retailer, which in January issued a shock profit warning, slipped to 30.2 per cent in the 12 weeks to 18 March from 30.6 per cent a year earlier.

And Asda grabbed a 17.9 per cent slice of the market, up from 17.3 per cent, reflecting the integration of Netto stores acquired last year. Together, the Asda and Netto shares amounted to 18 per cent a year ago.

Yesterday’s data from market researcher Kantar Worldpanel also revealed solid year-on-year gains for discounters Aldi, Iceland and Lidl.

Market shares at Sainsbury’s – Britain’s third-largest grocer – and Morrisons, at number four, were unchanged at 16.6 per cent and 12.3 per cent respectively.

The price war between the big supermarkets has intensified in recent months following the introduction of Tesco’s £500 million “Big Price Drop” campaign.

Asda’s price guarantee scheme offers to refund customers if their shop is not 10 per cent cheaper than at rivals, while Sainsbury’s has launched its own “Brand Match” guarantee offering.

Kantar director Edward Garner said the schemes from Asda and Sainsbury’s had helped “defuse” Tesco’s Big Price Drop.

“Even if people don’t redeem the Asda price guarantee, it has still put down a marker to say you can trust us on price.”

Waitrose market share rose from 4.3 per cent to 4.4 per cent.