February 28, 2012 / 12:49 PM / 6 years ago

Tesco's UK market share drops to 2005 level - Kantar

(Reuters) - The UK grocery market share of Tesco (TSCO.L), Britain’s biggest retailer, has fallen to levels not seen since 2005 as competition intensifies, industry data showed on Tuesday.

<p>Trolleys are seen at a Tesco supermarket in London January 12, 2012. REUTERS/Luke MacGregor</p>

Market research by Kantar WorldPanel said Tesco’s market share fell 0.6 percent year on year to 29.7 percent in the 12 weeks to February 19.

In contrast, the completion of the conversion of Netto stores acquired last year helped Britain’s No. 2 grocer Asda, owned by Wal-Mart Stores (WMT.N), retain the record share of 17.5 percent reported by Kantar last month.

Tesco issued its first profit warning in living memory on January 12.

No. 3 player J Sainsbury (SBRY.L) continued to outperform the market in 2012, lifting its share 0.1 percent to 16.6 percent.

Wm Morrison Supermarkets (MRW.L), the fourth-largest UK grocer, dipped 0.1 percent to 12.2 percent.

Waitrose, owned by John Lewis BB90_p.L JLP.UL, saw its share rise to a record 4.5 percent, while Aldi, Lidl and Iceland enjoyed double-digit growth to retain record shares.

Kantar Worldpanel said overall grocery sales in Britain climbed 4.5 percent year on year in the latest 12-week period, against 4.2 percent in the 12 weeks to January 22.

“While the growth rate remains lower than grocery price inflation, currently at 5.5 percent, the gap between the two measures is narrowing -- meaning pressure on household budgets, while still strong, is not getting any worse,” said Kantar Worldpanel director Edward Garner.

Separately on Tuesday, a survey by the Confederation of British Industry said British retail sales improved more than expected in February.

Reporting by James Davey; Editing by David Hulmes

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