Loyalty trumps price in post-Christmas supermarket war

Tesco’s national Clubcard campaign and ’double points scheme’ has helped the retailer nudge ahead of its rivals, according to Kantar Worldpanel’s latest grocery market share figures.

Tesco now commands 30.4% of the market – up from 30.1% – based on figures for the 12 weeks ending 21 February 2010. Asda’s share dropped by 0.2% to 17%.

Kantar’s figures show that the fight for post-Christmas sales swayed from the usual battleground of price.

Instead, the major multiples have stepped up their marketing activities such as loyalty schemes and coupons.

“Tesco has undoubtedly turned up the heat for Asda this month but the battle is by no means over,” says Kantar communications director Ed Garner. “Asda has reacted strongly with a major coupon scheme of its own and we expect to see the impact of this latest consumer onslaught in next month’s figures.”

Despite strong competition from Tesco and Asda, Sainsbury’s continues to perform ahead of the market, growing its share for the twelfth successive period to 16.3%. Morrisons has also posted another strong performance boosted by its store acquisitions on the back of the Co-operative’s assimilation of Somerfield.

Following its pre-Christmas £200m package of price cuts and promotions to support the takeover, the Co-operative has recorded the strongest growth this period with a year-on-year growth of 16.3%. This growth is just ahead of another “sparkling performance” from Waitrose which has posted a 15.5% year-on-year growth this month and lifted its market share to an all-time record of 4.3%, says Garner.

The news was less impressive for the discounters, however, with both Lidl and Aldi experiencing loss of market share. Their reversal of fortune, with market share back to a pre-recession level, can partly be attributed to increased price competition from the major retailers, according to Kantar.

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