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Business
Performance of the Top Four UK Supermarkets
The UK supermarket is dominated by four companies; Tesco, ASDA which is owned by WalMart, Sainsbury and Morrison's. In 2011, the four firms combined had a 75.8% of the UK market (Fooddeserts.org, 2012). With four firms controlling in excess of 75% of the market this is a highly concentrated market. The concentration has increased over the last decade; in 2002 the same four firms had only 64.8% of the market. Three out of the four firms have seen their market share increase over the since 2002, the only firm which lost market share, despite increasing sales significantly, was Sainsbury. Morrison's had the greatest increase with the acquisition of Safeway in 2003, this increased the market share, however, as part of the agreement Morrison's had to sell 52 of the Safeway stores following the acquisition, which is a factor in the decrease in market share in 2004. The majority if the stores went to Waitrose, with 14 sold to Sainsbury and several to the Co-op (Grocer, 2004). The annual market share of these four supermarkets is shown in table 1.
Table 1 Market share for the top four supermarkets in the UK 2002-2011
(Fooddeserts.org, 2012)
Year
Tesco
Asda
Sainsbury
Morrison
Combined market share
2002
25.9%
16.1%
17.1%
5.7%
64.8%
2003
27.0%
16.2%
16.2%
14.6%
74.0%
2004
28.0%
16.6%
15.7%
12.4%
72.7%
2005
30.4%
16.5%
15.9%
11.5%
74.3%
2006
31.1%
16.6%
16.2%
11.3%
75.2%
2007
31.3%
16.7%
16.3%
11.2%
75.5%
2008
31.1%
17.0%
16.2%
11.4%
75.7%
2009
30.7%
17.0%
16.3%
11.6%
75.6%
2010
30.6%
16.9%
16.6%
12.0%
76.1%
2011
30.4%
17.1%
16.3%
12.0%
75.8%
From this table it is apparent that Tesco dominates the market, with Morrison's in forth place. All firms have seen fluctuations in market share with increases and decreases in the market share; however it is the financial performance which the investors may feel is most important.
The annual sales for each firm have all seen an increase...
Tesco and WalMart, the parent firm of Asda, had a consistent increases year on year, Morrison's had only one year with a dip in 2003/4. The difficulties seen with market share for Sainsbury are apparent in the financial results, with a significant drop in 2004/5 with a slow recovery and the firm only gaining its former level of sales in 2009/10.
The sales for each firm are shown in table 2. Asda is owned by WalMart, who do not publish specific results for this subsidiary, so the results for WalMart have been included in the table to facilitate a comparison between the four firms. The sales are to total worldwide sales reported in the relevant audited annual accounts.
Table 2 Sales for the top four UK Supermarkets 2002/3-2011/12
Financial year
Tesco
£ billions
Asda
US$ millions
Sainsbury
£ millions
Morrison
£ millions
2002/3
25.6
226,479
18,144
4,335.6
2003/4
28.2
252,792
18,239
4,288.5
2004/5
32.9
281,488
15,202
4,944.1
2005/6
38.4
308,945
16,061
12,116
2006/7
39.5
344,992
16,860
12,462
2007/8
42.6
373,821
17,837
12,969
2008/9
51.8
401,087
18,911
14,528
2009/10
59.4
405,132
19,964
15,410
2010/11
62.5
418,952
21,102
16,470
2011/12
67.6
443,854
22,294
17,663
WalMart, (2007), 10k, retrieved 16th June 2012 from http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=IROL-secToc&TOC=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMDctMDY1NjAzL3RvYy9wYWdl&ListAll=1
WalMart, (2009), 10k, retrieved 16th June 2012 from http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=IROL-secToc&TOC=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTEtMDgzMTU3L3RvYy9wYWdl&ListAll=1&sXBRL=1
WalMart, (2012), 10k, retrieved 16th June 2012 from http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=IROL-secToc&TOC=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTItMTM0Njc5L3RvYy9wYWdl&ListAll=1&sXBRL=1
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