M RahmanCompetitors of Tesco (competitor analysis)
This article aims to explore the main competitors of Tesco in the UK grocery retail sector. Tesco is a British multinational retailer headquartered in Hertfordshire, England. It was founded by Jack Cohen over a century ago. It serves millions of customers every week in its stores and online.
Approximately 345,000 people work in Tesco. Tesco is the leader in the food and grocery market in the UK. It has thousands of stores that employ 300,000 people in the UK. It employs 13,000 people in Ireland where it has 152 stores. It also operates in some of the most promising and biggest markets in the world e.g. India, China, and Malaysia (Tesco, 2023).
Competitive landscape of Tesco
Tesco’s competitive landscape is divided into two categories; direct and indirect competitors. Direct competitors are those that offer the same products and services as Tesco, while indirect competitors are those that offer similar products and services but are not necessarily in the same market. Tesco also has a presence in many international markets, where it competes with both international and local retailers.
Competitors of Tesco in the UK
The direct competitors of Tesco in the UK are Sainsbury’s, Asda, Morrisons, Aldi, Co-op, Lidl, and Iceland. According to Kantar (2023), Tesco is the market leader with 27.5% market share. Its nearest rivals are Sainsbury’s and ASDA.
Tesco also faces a fierce competition from discounters such as Aldi and Lidl. Aldi is rapidly closing gap, and is challenging it and others such as Sainsbury’s, and ASDA. To counter that challenge, Tesco has introduced ‘Aldi Price Match’ offers. Competitive pressure from Morrisons is also very high.
Sainsbury’s is the second-largest supermarket in the UK. It has a slightly different target audience from Tesco, focusing on more affluent customers and offering more premium products. It also has a strong online presence, offering delivery and click-and-collect services.
Asda is the third-largest supermarket in the UK. It has a similar target audience like Tesco, focusing on value-conscious customers who are looking for the lowest prices. Asda has also been investing heavily in its online presence, offering delivery and click-and-collect services.
Aldi and Morrisons are in neck and neck battle for the 4th position in the UK’s grocery and supermarket industry. Both have been investing heavily in technology and automation to reduce costs and improve efficiency.
All of Tesco’s competitors have their own distinct strategies for competing with it. Sainsbury’s is focusing on premium products and expanding its online presence, while Asda is focusing on value-priced products and expanding its store network. Morrisons is focusing on value-priced products and expanding its store network, while Aldi is focusing on value-priced products and expanding its online presence.
Competitors of Tesco in international markets
Penny Market, CBA, Carrefour, Walmart, SPAR, Aldi, and Lidl are some of the biggest competitors of Tesco in international markets. Tesco also competes indirectly with many local retailers and convenience stores in its international markets.
Tesco also sees Amazon as a formidable competitor. Therefore, it has been seeking to establish strategic alliance with other global supermarket giants to combine sales close to that of Amazon. However, its efforts to do so have not been successful yet.
Indirect competitors of Tesco
In addition to the direct competitors, there are also a number of indirect competitors that Tesco competes with. These are companies that offer similar products and services but are not necessarily in the same market. These include online retailers, discount retailers such as Poundland, and convenience stores.
How does Tesco compete with its competitors?
Tesco fights with its competitors by applying different strategies. Quality products, affordable prices, store locations, and distribution channels are some of the key strategies.
Tesco has been focusing on expanding its range of own-brand products, which are more profitable than branded ones. It has also been investing heavily in technology and automation to reduce costs and improve efficiency. In addition, it has been focusing on expanding its network of stores across the UK and beyond.
However, it is worth mentioning that Tesco has been accused of being hostile towards some of the competitors. For instance, the UK’s Competition and Markets Authority (CMA) censured Tesco in February 2020 for breaking the law by blocking rivals from opening shops near its stores (Wood, 2020).
Summary of the competitors of Tesco (competitor analysis)
To conclude, Tesco is the market leader in the UK and one of the leading retailers in the world. However, it faces some formidable competitors. These competitors have different strategies and compete with it at various arenas.
Some of the competitors are focusing on increasing store presence, while others on online presence. Some are investing heavily in advertising, while others in increasing product ranges. Their strategies put enormous pressure on Tesco every day.
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Last update: 31 January 2023
References:
Kantar (2023) Great Britain: Grocery Market Share, available at: https://www.kantarworldpanel.com/en/grocery-market-share/great-britain (accessed 31 January 2023)
Tesco (2023) About us, available at: https://www.tescoplc.com/about-us/our-businesses/ (accessed 31 January 2023)
Wood, Z. (2020) Tesco stopped rivals opening nearby stores, watchdog finds, available at: https://www.theguardian.com/business/2020/feb/14/tesco-stopped-rivals-opening-nearby-stores-watchdog-finds (accessed 30 January 2023)
Photo credit: www.tescoplc.com
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
