Tesco launches new promotions as Asda creeps ahead

08 August, 2008

Tesco has launched a fight back against its rivals after losing market share to Asda, Morrisons and the discount chains.

The supermarket is launching its own three-for-£10 mechanic after watching Asda's success with a similar promotion since the beginning of the year with 50 of its top-selling wines.

But Tesco insisted that it was working with its suppliers, using sub-brands rather than flagship products to ensure margins were preserved. Some suppliers, while expressing admiration for Asda's success in driving volumes and growing share, have questioned its long-term viability - and their own ability to make money out of its tactics.

According to the latest data from TNS, Tesco and Sainsbury's retain their number one and two positions in the wine market, with market shares of 30.1% and 18.7% respectively, though both figures have fallen slightly in the 12 weeks to June 15.

Meanwhile, Asda has grown its market share to 11.7%, Morrisons is up slightly to 9.6%, and the discounters have reflected their advances in the grocery market as a whole by increasing their share of the wine market to 5.7%.

Tesco BWS boss Dan Jago said: "There is no doubt that despite the best wishes of the wine industry

the consumer is increasingly price-sensitive.

"Tesco's position is that we continue to be a broad-based retailer looking after all sections of the market. Three-for-£10 clearly works and ours is a very good offer . Rather than rushing into it blindly we will take a careful and considered approach in partnership with our suppliers."

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