Since December 1997 the big boys have added only 0.7% market share. However, their dominance of the retail scene continues, with a 60% share of the grocery market, according to IGD's Grocery Retailing: The Market Report 2002.
Between them the major multiples had 4,265 stores in 2001 an increase of nearly 1% on the previous year, with a joint sales area of nearly 75 million sq ft up 3%. Stores are getting bigger, with an average growth of 2% to more than 17,500 sq ft.
And it should come as no surprise after the events of recent weeks, that Tesco is the biggest and best at almost everything. Superstores, packaged groceries, fresh food, loyalty you name it, Tesco's top of the pile.
It is the superstore king, with 329, in a year when the number of superstores rose by 34 to 1,185, either through extensions or new builds. The number of Tesco Extras were doubled but their average size dropped by nearly 10%, mainly because many of the premises are extensions and redevelopments.
Morrisons and Tesco opened the most stores as a proportion of their portfolio, while Sir Ken's chain also took second place to Tesco for its increase in total sales area, at just over 5%.
Sainsbury did reasonably too, increasing sales area by nearly 5% during the year, coming in at number three of the major multiples.
When it comes to share of categories Tesco has the largest slice of the packaged grocery sector at more than 25%, a 7.4% growth during 2001 which is more than double the industry average.
For the second year running Morrisons achieved the fastest rate of growth in the category, at more than 15%, making it likely that the chain will overtake Somerfield in the category this year.
In fresh food, Tesco and Sainsbury each had more than 20% share but Waitrose had the highest growth, at more than 24%, making fresh food the chain's strongest category. Morrisons was not far behind as growth of nearly 20% took its market share to 6%.
Each of the big four has scaled down its own label offer but there has been a more rapid decline at Kwik Save and Iceland. IGD says this could be because of a general focus on price, and in particular the move to every day low pricing.
It says: "The gap between branded and own label products is also smaller and more constant, which makes the branded product seem relatively more affordable."
There has also been some weeding out' of weaker own label offerings. Sainsbury in particular, which had nearly 50% own label penetration, has tried to re-balance its product offer with more branded products.
This downward trend does not look set to continue however, because of the strong growth in fresh categories, a focus on premium ranges and the higher margins on own label.
Although sales are strong at Tesco and growth is steady, its customers are failing to prove as loyal as they once were, according to Taylor Nelson Sofres data. Despite the fact that the Cheshunt chain achieved more than 70% of turnover from its loyal customers, this was a reduction of 2% on the previous year. Other retailers near to the 70% threshold are Sainsbury, Asda and Morrisons.
However, the performance of retailers with loyalty cards, notably Tesco and Sainsbury, was not significantly better than those retailers which do not have mainstream loyalty cards. According to TNS figures, Tesco has the largest spend per visit over a four-week period however, at more than £103, a lead of 5.3% over the next highest, Sainsbury.
But that isn't as good as it sounds: TNS finds it was an increase of 2.4% on the previous year, the smallest percentage rise of the four retailers with the highest average spends. Sainsbury (5.3%), Asda (8.0%) and Morrisons (6.1%) all increased average spend, and get more than £90 a visit over a four-week period.
Of the leading retailers Asda has been the most successful in keeping a pricing level that is less than the market average, with a gap of about 10% since the start of 2001.
They're obviously doing something right because the major multiples' combined group operating profit topped £4bn last year almost a 15% increase. Meanwhile, their average operating margin rose to 4.6% from 4.5%.Of the leading four retailers, Tesco and Sainsbury achieved small increases in their operating margin, although both report lower margins than those achieved in 1995/6.
With Iceland the exception, everyone reported an increase in pre-tax profit and Tesco did best with a staggering £1.2bn profit, although Marks and Spencer's turnaround gave it 130%, the highest percentage increase during the year.
Tesco and Asda achieved the highest levels of sales productivity in the UK at more than £20 per sq ft a week. During the year both retailers have increased their productivity by nearly 3% and more than 7% respectively.
Sainsbury spends the most on advertising although, as a percentage of turnover, Iceland spends the biggest proportion of its resources at about 1%.
Elsewhere, the Co-operative movement is making strides and has 2,355 stores across 38 societies after buying more smaller shops. This has also led to average store size dipping to 4,586 sq ft as bigger stores are sold off. Co-ops now run only 37 stores with a sales area above 25,000 sq ft.
The Co-op brand is getting stronger because own label share rose from 28.2% to 30.7% between 1998 and 2001, but the Co-op shopper is less affluent than the market average, with 39% of customers' spend in the D/E groupings compared with 31% for the total market. Older people are the biggest fans 60% of its spend comes from shoppers aged 45 and over, compared with 53% for the total market and 48% for Tesco.
Co-operative outlets have seen a slight drop in the frequency of shopper visits during a four-week period, but this hasn't stopped turnover growing year-on-year and by 2.6% in 2000 to over £9.7bn. However, the bulk of this increase has come from the travel and banking sectors, with the core food retailing business increasing only marginally in value.
Small stores in general are on a roll the UK convenience market is valued at £20.6bn, a growth of £1bn (5.3%) on 2001. All sectors have been growing, apart from the non-affiliated independents, which show a decline of 0.3%, due largely to a reduction in store numbers. Symbol groups grew rapidly in 2001 and 2002, with sales up 9.3% year-on-year.
"The convenience multiple groups must focus on driving sales space harder as the average store size gets larger," advises the IGD. "The sales density ratio within this group of stores dropped by 4% to an average of £9.29. Clearly there is scope to improve this ratio much further."
Independent entrepreneurs are still the key providers of convenience shopping in the UK, operating 61.6% of all stores in the sector and accounting for 42.4% of sales.
With all these operators there is not much room for specialist retailers on the high street: Taylor Nelson Sofres calculates that they accounted for only 9.2% of retail sales of fresh fruit and vegetables in 2001, down from 11.5% in 2000. In the same period the share in the fresh fruit and vegetable sales held by the multiples rose from 79% to 81.9%.
Discounters also appear to be squeezed, with stores falling 7.9% to 1,441.
In the overall market, the convenience sector holds a 20% share while 13% is held by smaller multiples, independents and specialists; 5% by the co-operatives; and 2% by the hard discounters.
Judging by this research, many might be putting up a spirited fight against the major multiples, but with the proposed Tesco acquisition of T&S and the Co-op's purchase of Alldays, both in the c-store sector, how long before their proportion is further eroded?
{{ANALYSIS }}
Between them the major multiples had 4,265 stores in 2001 an increase of nearly 1% on the previous year, with a joint sales area of nearly 75 million sq ft up 3%. Stores are getting bigger, with an average growth of 2% to more than 17,500 sq ft.
And it should come as no surprise after the events of recent weeks, that Tesco is the biggest and best at almost everything. Superstores, packaged groceries, fresh food, loyalty you name it, Tesco's top of the pile.
It is the superstore king, with 329, in a year when the number of superstores rose by 34 to 1,185, either through extensions or new builds. The number of Tesco Extras were doubled but their average size dropped by nearly 10%, mainly because many of the premises are extensions and redevelopments.
Morrisons and Tesco opened the most stores as a proportion of their portfolio, while Sir Ken's chain also took second place to Tesco for its increase in total sales area, at just over 5%.
Sainsbury did reasonably too, increasing sales area by nearly 5% during the year, coming in at number three of the major multiples.
When it comes to share of categories Tesco has the largest slice of the packaged grocery sector at more than 25%, a 7.4% growth during 2001 which is more than double the industry average.
For the second year running Morrisons achieved the fastest rate of growth in the category, at more than 15%, making it likely that the chain will overtake Somerfield in the category this year.
In fresh food, Tesco and Sainsbury each had more than 20% share but Waitrose had the highest growth, at more than 24%, making fresh food the chain's strongest category. Morrisons was not far behind as growth of nearly 20% took its market share to 6%.
Each of the big four has scaled down its own label offer but there has been a more rapid decline at Kwik Save and Iceland. IGD says this could be because of a general focus on price, and in particular the move to every day low pricing.
It says: "The gap between branded and own label products is also smaller and more constant, which makes the branded product seem relatively more affordable."
There has also been some weeding out' of weaker own label offerings. Sainsbury in particular, which had nearly 50% own label penetration, has tried to re-balance its product offer with more branded products.
This downward trend does not look set to continue however, because of the strong growth in fresh categories, a focus on premium ranges and the higher margins on own label.
Although sales are strong at Tesco and growth is steady, its customers are failing to prove as loyal as they once were, according to Taylor Nelson Sofres data. Despite the fact that the Cheshunt chain achieved more than 70% of turnover from its loyal customers, this was a reduction of 2% on the previous year. Other retailers near to the 70% threshold are Sainsbury, Asda and Morrisons.
However, the performance of retailers with loyalty cards, notably Tesco and Sainsbury, was not significantly better than those retailers which do not have mainstream loyalty cards. According to TNS figures, Tesco has the largest spend per visit over a four-week period however, at more than £103, a lead of 5.3% over the next highest, Sainsbury.
But that isn't as good as it sounds: TNS finds it was an increase of 2.4% on the previous year, the smallest percentage rise of the four retailers with the highest average spends. Sainsbury (5.3%), Asda (8.0%) and Morrisons (6.1%) all increased average spend, and get more than £90 a visit over a four-week period.
Of the leading retailers Asda has been the most successful in keeping a pricing level that is less than the market average, with a gap of about 10% since the start of 2001.
They're obviously doing something right because the major multiples' combined group operating profit topped £4bn last year almost a 15% increase. Meanwhile, their average operating margin rose to 4.6% from 4.5%.Of the leading four retailers, Tesco and Sainsbury achieved small increases in their operating margin, although both report lower margins than those achieved in 1995/6.
With Iceland the exception, everyone reported an increase in pre-tax profit and Tesco did best with a staggering £1.2bn profit, although Marks and Spencer's turnaround gave it 130%, the highest percentage increase during the year.
Tesco and Asda achieved the highest levels of sales productivity in the UK at more than £20 per sq ft a week. During the year both retailers have increased their productivity by nearly 3% and more than 7% respectively.
Sainsbury spends the most on advertising although, as a percentage of turnover, Iceland spends the biggest proportion of its resources at about 1%.
Elsewhere, the Co-operative movement is making strides and has 2,355 stores across 38 societies after buying more smaller shops. This has also led to average store size dipping to 4,586 sq ft as bigger stores are sold off. Co-ops now run only 37 stores with a sales area above 25,000 sq ft.
The Co-op brand is getting stronger because own label share rose from 28.2% to 30.7% between 1998 and 2001, but the Co-op shopper is less affluent than the market average, with 39% of customers' spend in the D/E groupings compared with 31% for the total market. Older people are the biggest fans 60% of its spend comes from shoppers aged 45 and over, compared with 53% for the total market and 48% for Tesco.
Co-operative outlets have seen a slight drop in the frequency of shopper visits during a four-week period, but this hasn't stopped turnover growing year-on-year and by 2.6% in 2000 to over £9.7bn. However, the bulk of this increase has come from the travel and banking sectors, with the core food retailing business increasing only marginally in value.
Small stores in general are on a roll the UK convenience market is valued at £20.6bn, a growth of £1bn (5.3%) on 2001. All sectors have been growing, apart from the non-affiliated independents, which show a decline of 0.3%, due largely to a reduction in store numbers. Symbol groups grew rapidly in 2001 and 2002, with sales up 9.3% year-on-year.
"The convenience multiple groups must focus on driving sales space harder as the average store size gets larger," advises the IGD. "The sales density ratio within this group of stores dropped by 4% to an average of £9.29. Clearly there is scope to improve this ratio much further."
Independent entrepreneurs are still the key providers of convenience shopping in the UK, operating 61.6% of all stores in the sector and accounting for 42.4% of sales.
With all these operators there is not much room for specialist retailers on the high street: Taylor Nelson Sofres calculates that they accounted for only 9.2% of retail sales of fresh fruit and vegetables in 2001, down from 11.5% in 2000. In the same period the share in the fresh fruit and vegetable sales held by the multiples rose from 79% to 81.9%.
Discounters also appear to be squeezed, with stores falling 7.9% to 1,441.
In the overall market, the convenience sector holds a 20% share while 13% is held by smaller multiples, independents and specialists; 5% by the co-operatives; and 2% by the hard discounters.
Judging by this research, many might be putting up a spirited fight against the major multiples, but with the proposed Tesco acquisition of T&S and the Co-op's purchase of Alldays, both in the c-store sector, how long before their proportion is further eroded?
{{ANALYSIS }}
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