ated £49.7 billion of total sector turnover, whereas small businesses had
only a 10 per cent share with £5.2 billion. (Several major multiples domi-
nated the sector: Sainsbury, Tesco, Safeway [Argyll group], Asda,
Somerfield [Gateway, and Somerfield stores], Kwik Save and Iceland,
together with the co-operative societies). Since 1990 large grocery retailers
had advanced their turnover by an average of 40 per cent, whilst smaller
ones had grown by only 8 per cent. By 1992 chains with 100 or more stores
accounted for 68.5 per cent of sector sales.
The market was commonly beset by price skirmishes, with each store
trying to wrest the price initiative from their rivals. Growth had not come
from traditional product categories and consumer expenditure on food as
a percentage of total consumer expenditure had actually fallen over this
period but it was the larger supermarkets that were better equipped to sell
products in other expenditure categories to achieve growth. The market
was considered to be saturated apart from the discounters, and the multi-
ples were selling more or less the same things for the same prices.
However, one area where there was seen to be a difference was in the
demographic profile of the shoppers for each chain: J. Sainsbury was seen
to have an older, more up-market clientele, Tesco’s profile was much
younger, with a larger percentage of 25 to 45 year-olds and Safeway’s was
very similar to Tesco. Kwik Save, with most stores situated in poorer city
centres in the North, had an older, less affluent customer profile, whilst
Asda catered for the younger family on a tight budget. Table 2.3.1, showing
sector performance for 1993, shows Sainsbury with a clear lead, Tesco in its
80 Relationship Marketing
Table 2.3.1 UK grocery sector, performance figures, year ending 1992/93
1992/1993 Market share^1 Turnover Pre-tax profits Profits as %
(% of total (£ million) (£ million) of turnover
market)
Sainsbury 17.3 9685 732.8 7.6
Tesco 14.9 7581 580.9 7.6
Safeway 8.6 5196 417.3 8.0
Asda 8.4 4614 142.1 3.0
Kwik Save 5.8 2651 126.1 4.7
Source:Taylor Nelson AGB: Retailer ShareTrack and Reuters.
Notes: Sainsbury + Savacentre, Safeway + Presto + other Argyll stores, Asda + Dales.
(^1) Assessed across 179 selected markets (packaged goods, fresh foods and toiletries) by Taylor Nelson
AGB, which is recognized by the sector as the most comprehensive measurement. It is not related to
annual turnover but represents each retailer’s share of these specific markets.Annual turnover is made
up of non-grocery goods, e.g. petrol, fashion clothing and in Sainsbury’s case also includes Homebase
sales, and as a result market share cannot be easily or fairly judged by turnover figures.