Tesco, Morrisons and Aldi slug it out

Britain’s biggest supermarket – Tesco – which accounts for one pound for every seven which is spent on the high street – has just recorded its worst figures in 15 years which gives another indication of how deep the recession is becoming.

The inquiry into what’s going wrong at Tesco is beginning. A widely held view is that there are three main reasons Tesco is under increasing pressure.

The first reason is that the Tesco discounting and budget range strategy has failed to fire the shopper’s imagination.

The second is that the competition is hotter than ever and is now turning into a bloodbath which will result in retailing casualties on an unprecedented scale.

The third reason is that a wave of anti-Tesco is sentiment has swept the country. It is perceived that consumer resistance has been galvanised throughout the UK after town after town has fought – and several have won - Tesco plans to expand its empire, a process which can jeopardise existing high streets and imperil shopkeepers’ livelihoods.

New research shows Tesco customers have been deserting it in droves in favour of Morrisons and Asda. Its Xmas advertising campaign with warbling Des O’Connor in a bad taste golfing pullover – like Rupert Bear on the Links – seems to have misfired.

The advertisement was intended to be funny and ironic. O’Connor is blocked out as he croons some familiar Christmas ditty by giant baubles which suddenly come into shot offering bargains. Experts in advertising sector condemn it as boring and ‘old hat.’

The Times newspaper reports that previously unpublished data reveals that in the 12 weeks to November £22 million of spending was grabbed from Tesco by Asda. Another £10m went to the German discounter Aldi – and about as much again to Morrisons.

It had been previously thought Netto and Lidl and Aldi were Tesco’s big competitors. But Lidl took only a tiny amount of trade from Tesco. And Tesco won trade from the Danish chain Netto.

On the marketing front Sainsbury’s have stuck with Jamie Oliver with midget-size comics Ant and Dec. Asda has abandoned ‘celebrities’ and prefers to show people becoming excited in a Yorkshire village as they get ready for the festivities.

Lately several towns have scored notable victories in rejecting Tesco’s plans for expanding their chain. In the same way that millions of people voted for John Sargent
on TV’s Strictly Come Dancing Britain always likes to support under dogs.