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HomeMarketingTesco claims it is winning share from Waitrose and M&S

Tesco claims it is winning share from Waitrose and M&S

tescoTesco claims it is gaining market share from higher-end retailers, such as Waitrose and M&S, as it invests in its Finest product line.

In its latest quarterly update, the supermarket said it has seen nine consecutive quarters of profit conversions from high-end retailers. Tesco cited Kantar data for the 12 weeks ending May 14, which said it demonstrated profitability from M&S and Waitrose.

In a results call today (June 16), Tesco CEO Ken Murphy said the increase in market share was a result of customers choosing retailers for more “opportunities to entertain” when they want to “enhance” the dining experience. The supermarket’s Finest premium food line is allowing the supermarket to better tap into these occasions, he added.

Murphy won’t know specifically which consumer groups are offering discounts, he said: “More or less everyone in the country shop with Tesco at some point of the year… You can’t identify a group of customers. any specific. [which have switched]it is traded quite widely among customer groups.”

During the pandemic, Tesco’s growing penetration has brought more testing to its premium product line, he said, with many consumers “surprised” at its quality.

Murphy said the company has also invested “an enormous amount” of money in upgrading and improving its Finest product line over the past two years. Sales of this product line grew 14.9%, with more than 100 new products added.

Although Tesco has reported share gains from high-end retailers, on the other end of the spectrum it remains under pressure from retailers Aldi and Lidl.

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According to data from Kantar, Tesco increased its annual sales value in the 12 weeks to May 14, but its total market share until roll fell 0.3 percent year-on-year to 27.1%. Meanwhile, Aldi’s market share has increased from 9% in 2022 to 10.1% this year, and Lidl’s has also increased from 6.9% to 7.7%.

We feel very strongly that we are working very hard for our customers.

Ken Murphy, Tesco

Murphy said Tesco is working to prevent any loss of shares, saying the supermarket is competing for every store “on a mission-by-mission basis”.

He’s offering consumers “convenient” deals by using his Clubcard recommendation to “get closer” to them and make sure it delivers the best value possible, he added.

The CEO credited Tesco’s “continuous and unwavering focus on value and quality” with facilitating a series of “strong” results in the most recent quarter. The supermarket generated £13.79 billion in sales in the UK and Ireland in the 13 weeks ending May 27, representing an 8.8% increase year-on-year.

It also highlighted its online sales, up 8.2% year-over-year. Its share of the online grocery market also increased 75 basis points to 37.5%.

Inflation eases?

Tesco believes the UK has passed the peak of inflation, Murphy said, reflected in the potential for price cuts on particularly affected items, such as milk and cereals.

While Murphy admits that the Bank of England’s headline inflation rate remains “stubbornly high”, he insists the inflation rate suffered by Tesco shoppers is much lower.

This is due to the “savvy” nature of Tesco customers and supermarkets have the ability to allow consumers to transact where they need to.

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“[Shoppers] were able to work on different product groups, different proteins, etc., which allowed them to manage their shopping cart costs more effectively, which meant that the overall inflation rate was not. should be the rate of inflation that customers experience at Tesco,” he said.

Confidence in supermarkets drops to 9-year low as consumers feel ‘ripped off’

With input prices falling and the cost of food inflation to consumers remaining high, there have been some accusations of supermarkets and food manufacturers “taking profit” amid the cost of living. crisis activity.

Murphy claims that “the facts speak for themselves” in Tesco’s filings, pointing to falling profits in the most recent financial year. The supermarket generated a profit of 3.8 pence in pounds in the most recent financial year; years ago, it was about 4.4 pence.

“We don’t believe that would be called profiteering; We think it’s a pretty slim profit to run a business of our size and so I think we feel very clearly that we are working very hard for our customers. myself,” he said.

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