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Tesco starting to show the strain with evidence of 'domestic underperformance'

Tesco's performance in Britain is showing signs of persistent strain, according to a long-range study covering the past decade.

The report's release comes as new chief executive Philip Clarke nears the end of his six-month review of the group – which includes units in Europe, Asia and the US – and the departure announced last week of top executive Andrew Higginson.

Market share and sales per square foot have fallen over the past four years while like-for-like sales growth has weakened, providing evidence of 'domestic underperformance'.

The author of the report, Robert Clark of Retail Knowledge Bank, said: 'They have found themselves on a plateau in Britain for a few years now and they need to focus on re-energising that business.'
Tesco's market share four years ago was 31.8 per cent, but that has slipped to about 30.5 per cent despite significant store expansion. Morrisons, Waitrose and discounters such as Aldi and Lidl have had stronger growth.

Clark said the huge market share of Tesco could leave it unwieldy compared to its rivals.
New boss Clarke succeeded Sir Terry Leahy in April after a hotly contested leadership battle.
Higginson's planned departure next year has led to speculation of upheaval. Sources have said others may follow his lead.

Several members of the executive board have previously been linked to the top job, including Higginson, deputy group chief executive and US chief Tim Mason and UK chief executive Richard Brasher.

Source : Neil Craven

28 August 2011
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