Grocery market cheer for Tesco

Tesco bagsThere have been further signs that Tesco's turnaround plan is on track, with new figures showing Britain's biggest grocer is outpacing its three main rivals.

The supermarket giant notched up the best sales growth of the "big four" chains to hold its market share at 30.4% in the 12 weeks to January 20, while Asda, Sainsbury's and Morrisons all lost ground.

But Tesco failed to stave off the march of the discount brands with Aldi posting the strongest supermarket sales growth of 28.2%, increasing its market share from 2.5% a year earlier to 3.1%, while Lidl's market share was also up to 2.7% after it grew sales by 10%.

At the premium end of the spectrum Waitrose also took customers from competitors, increasing its market share from 4.4% to 4.6% after an 8% hike in sales.

Sales at Tesco grew 3.3% to £8 billion in the period, matching the rate of growth across the sector for the first time since June 2011, according to market researcher Kantar Worldpanel. Kantar director Edward Garner said: "These positive results are a sign of stabilisation for Tesco as the retailer gets back on track with customers."

Tesco revealed its best UK sales growth in three years over Christmas after chief executive Philip Clarke invested in a range of turnaround initiatives, including employing an extra 8,000 staff and launching its Everyday Value range.

But Mr Garner said Tesco's improvement had put some pressure on the rest of the big four, with Morrisons posting a 1.7% drop in sales, taking its market share from 12.5% to 11.9%.

The fourth biggest supermarket admitted it was feeling the heat from rivals in a "highly promotional" market, after posting below-par Christmas sales.

Kantar said that with grocery inflation growing faster than growth in the market there was a heightened need for retailers to "deliver value for money".

There were also signs of the revival of The Co-operative Group, which has struggled to compete with the main supermarkets. It reported a 0.9% rise in sales, after declines throughout 2012.

High Street casualties
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Grocery market cheer for Tesco

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.


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