Tesco has snatched the crown away from Asda and become Britain’s Favourite Supermarket - and also won two other accolades in this year’s awards. Siân Harrington reports
It has been judged The Grocer of the Year for two years running by The Grocer Gold Awards’ survey of industry experts. But now Tesco is also the consumers’ choice, snatching the coveted title of Britain’s Favourite Supermarket from Asda at The Grocer Gold Awards this week. Tesco also walked away with Best Consumer Initiative for the effective marketing of its new GI range (see box).
The award for Britain’s Favourite Supermarket is based on the views of 7,305 households statistically weighted to be representative of the overall population.
Asda had held the nation’s favourite spot for two years, and Tesco’s victory this year shows that, despite a year of vociferous attacks on its dominance, it has raised the bar when it comes to satisfying the customer.
Sir Terry Leahy’s obsession with lowering out-of-stocks has paid off, with consumers now rating Tesco higher than Asda on availability.
The Attitudes to Retailers research, conducted by ACNielsen using its Homescan household panel members, also reveals that shoppers believe Tesco is better than Asda in service and range, although among those aged 16-24, Asda is still top for service.
However, with Tesco and Asda locked in a bitter battle over price, consumers still think Asda is doing a better job when it comes to their pockets. This was mirrored in The Grocer 33 basket survey last week, which showed Asda was the cheapest supermarket for the eighth consecutive year.
Marks and Spencer still rules when it comes to quality. But Tesco, which was number four last year, has jumped into second place and takes the top position for quality in Wales and the south west. Sainsbury came third for quality, pushing Asda out of the top three.
ACNielsen asked panel members to vote for the best and second-best supermarket for price, range, quality, service and availability in February. A pre-defined list of retailers was used: Asda, The Co-operative Group, Kwik Save, Iceland, M&S, Morrisons and Safeway, Sainsbury, Somerfield, Tesco and Waitrose. Overall performance was calculated by weighting best by two and second best by one for each question.
Shoppers prefer Tesco in eight of the 12 regions analysed by ACNielsen. Unsurprisingly,Morrisons is favourite in Yorkshire, while shoppers in Lancashire, Tyne Tees and central Scotland prefer Asda.
Tesco also buried the competition when it came to The Grocer of the Year, which is voted for by its peers. It took 57% of all votes, more than double that of second-placed Waitrose and four times the amount of Asda, the only other significant contender. With Tesco making a £2bn profit this year, it is no surprise that all but one of the leading analysts, non-grocery retailers, suppliers and business journalists polled gave it top marks for financial performance.
The strength of its supply chain is also evident, with three quarters of those polled saying it is the industry’s outstanding performer in this.
With Tesco also taking the most points for quality of management and customer focus, it is only on commitment to corporate social responsibility that it loses out to Waitrose. Its record on CSR is reflected in the AccountAbility world ranking, which in April gave Tesco only 26% for CSR. However, Tesco has done a better job in raising its CSR credentials, as last year it did not figure at all.
Waitrose was just pipped by Tesco for customer focus, the only company to come anywhere near it. Morrisons, which was just one vote behind Tesco last year on financial performance and supply chain, does not register at all this year. And Sainsbury and The Co-operative Group got a mere handful of votes.
Tesco broke through the 30% market share barrier for the first time in April, according to The Grocer’s monthly TradeTrak research by ACNielsen. And this month it reached 30% of grocery-only spend. Compare this with April 2004 when Tesco had 27.5% of total till spend and 27.1% of food-only spend. With Tesco determined to follow the consumer pound wherever it is spent, non-food sales have grown by 17% to £6bn and the company is estimated to take close to 7% non-food market share. Within this, growth in clothing has accelerated by 28% and Tesco is now looking to buy Cherokee, the American clothing brand, for which it already has exclusive UK distribution rights. In-home entertainment sales are up a fifth and health and beauty up 13%. And in the past year it has launched Tesco Mobile and digital downloading.
Much of Tesco’s success is the result of applying the Richard Branson approach - taking complicated areas and simplifying them. It has launched Tesco Law, an online store for low-cost legal services, and is now taking a leading position in health with GI products.
Analyst Shore Capital believes Tesco has barely scratched the surface in many areas of its business and expects it to double profits internationally by 2009. And PlanetRetail believes it will increase its global grocery market share to nearly 2% in the next three years.
The next year will see whether Tesco can truly reinvent itself as a general merchandise retailer à la Wal-Mart. The success of its Extra hypermarket format has encouraged it to try its hand at standalone non-food stores. The launch of Homeplus stores in Aberdeen and Manchester in October will create 30,000 sq ft outlets resembling Extra, but without the food. This is a canny way of bringing Tesco’s non-food range to the one in five UK shoppers who have no access to an Extra.
The move will increase the pressure on Asda as well as non-food retailers. Jonathan Pritchard, analyst at Oriel Securities, says: “We are firmly behind Tesco’s more aggressive moves into non-food, and think there is some fairly soft market share to win in that part of the market.”
It is hard to see, without unlikely government intervention, how Tesco will fail to gain The Grocer of the Year for the third time at next year’s awards. But, with signs of a backlash evident, it will need to work harder to remain Britain’s Favourite Supermarket.
It has been judged The Grocer of the Year for two years running by The Grocer Gold Awards’ survey of industry experts. But now Tesco is also the consumers’ choice, snatching the coveted title of Britain’s Favourite Supermarket from Asda at The Grocer Gold Awards this week. Tesco also walked away with Best Consumer Initiative for the effective marketing of its new GI range (see box).
The award for Britain’s Favourite Supermarket is based on the views of 7,305 households statistically weighted to be representative of the overall population.
Asda had held the nation’s favourite spot for two years, and Tesco’s victory this year shows that, despite a year of vociferous attacks on its dominance, it has raised the bar when it comes to satisfying the customer.
Sir Terry Leahy’s obsession with lowering out-of-stocks has paid off, with consumers now rating Tesco higher than Asda on availability.
The Attitudes to Retailers research, conducted by ACNielsen using its Homescan household panel members, also reveals that shoppers believe Tesco is better than Asda in service and range, although among those aged 16-24, Asda is still top for service.
However, with Tesco and Asda locked in a bitter battle over price, consumers still think Asda is doing a better job when it comes to their pockets. This was mirrored in The Grocer 33 basket survey last week, which showed Asda was the cheapest supermarket for the eighth consecutive year.
Marks and Spencer still rules when it comes to quality. But Tesco, which was number four last year, has jumped into second place and takes the top position for quality in Wales and the south west. Sainsbury came third for quality, pushing Asda out of the top three.
ACNielsen asked panel members to vote for the best and second-best supermarket for price, range, quality, service and availability in February. A pre-defined list of retailers was used: Asda, The Co-operative Group, Kwik Save, Iceland, M&S, Morrisons and Safeway, Sainsbury, Somerfield, Tesco and Waitrose. Overall performance was calculated by weighting best by two and second best by one for each question.
Shoppers prefer Tesco in eight of the 12 regions analysed by ACNielsen. Unsurprisingly,Morrisons is favourite in Yorkshire, while shoppers in Lancashire, Tyne Tees and central Scotland prefer Asda.
Tesco also buried the competition when it came to The Grocer of the Year, which is voted for by its peers. It took 57% of all votes, more than double that of second-placed Waitrose and four times the amount of Asda, the only other significant contender. With Tesco making a £2bn profit this year, it is no surprise that all but one of the leading analysts, non-grocery retailers, suppliers and business journalists polled gave it top marks for financial performance.
The strength of its supply chain is also evident, with three quarters of those polled saying it is the industry’s outstanding performer in this.
With Tesco also taking the most points for quality of management and customer focus, it is only on commitment to corporate social responsibility that it loses out to Waitrose. Its record on CSR is reflected in the AccountAbility world ranking, which in April gave Tesco only 26% for CSR. However, Tesco has done a better job in raising its CSR credentials, as last year it did not figure at all.
Waitrose was just pipped by Tesco for customer focus, the only company to come anywhere near it. Morrisons, which was just one vote behind Tesco last year on financial performance and supply chain, does not register at all this year. And Sainsbury and The Co-operative Group got a mere handful of votes.
Tesco broke through the 30% market share barrier for the first time in April, according to The Grocer’s monthly TradeTrak research by ACNielsen. And this month it reached 30% of grocery-only spend. Compare this with April 2004 when Tesco had 27.5% of total till spend and 27.1% of food-only spend. With Tesco determined to follow the consumer pound wherever it is spent, non-food sales have grown by 17% to £6bn and the company is estimated to take close to 7% non-food market share. Within this, growth in clothing has accelerated by 28% and Tesco is now looking to buy Cherokee, the American clothing brand, for which it already has exclusive UK distribution rights. In-home entertainment sales are up a fifth and health and beauty up 13%. And in the past year it has launched Tesco Mobile and digital downloading.
Much of Tesco’s success is the result of applying the Richard Branson approach - taking complicated areas and simplifying them. It has launched Tesco Law, an online store for low-cost legal services, and is now taking a leading position in health with GI products.
Analyst Shore Capital believes Tesco has barely scratched the surface in many areas of its business and expects it to double profits internationally by 2009. And PlanetRetail believes it will increase its global grocery market share to nearly 2% in the next three years.
The next year will see whether Tesco can truly reinvent itself as a general merchandise retailer à la Wal-Mart. The success of its Extra hypermarket format has encouraged it to try its hand at standalone non-food stores. The launch of Homeplus stores in Aberdeen and Manchester in October will create 30,000 sq ft outlets resembling Extra, but without the food. This is a canny way of bringing Tesco’s non-food range to the one in five UK shoppers who have no access to an Extra.
The move will increase the pressure on Asda as well as non-food retailers. Jonathan Pritchard, analyst at Oriel Securities, says: “We are firmly behind Tesco’s more aggressive moves into non-food, and think there is some fairly soft market share to win in that part of the market.”
It is hard to see, without unlikely government intervention, how Tesco will fail to gain The Grocer of the Year for the third time at next year’s awards. But, with signs of a backlash evident, it will need to work harder to remain Britain’s Favourite Supermarket.
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