Tesco: Competitors and Swot Analysis

Although Tesco still dominates the UK market it is beginning to feel the pressure coming from the tough competition it's facing from the likes of Sainsburys, Asda, and Morrisons. Tesco already offers groceries, mobile phone contracts, DVD's games and CDs, and has its own clothing range, and in a new bid to out do its competition Tesco announced earlier this year that it was planning on entering into the mortgage market. Tesco hopes that by going ahead with this ambitious move it will continue to rule the market, and distance them further from the competition. (Financial Times).

One of Tesco's biggest competitors is Sainsburys. Throughout the 1970's and 1980's Sainsburys was at the height of its success and the UK's market leader. However due to the companies lack of drive when it came to the subject of expansion, Tesco managed to quite quickly overtake Sainburys with the use of its out-of-town expansion and began its reign as king of the UK market in the early 90's (Gaurdian.co.uk). However Sainsburys has begun fighting back and is slowly creeping up on Tesco, recently seeing its best sales performance in 20 years. But with Tesco announcing a 12.5% increase in profit last month (Mintel), Sainsburys is still lagging far behind and has a lot of work to do before it can ever reach the success it once had.

Another one of Tesco's competitors, and the store that holds joint second place in the UK market with Sainsburys, is Asda. The two have been in what seems to be a never ending price war for 6 years, with Asda promising 'every day low pricing' and Tesco constantly slashing its prices, the two seem to be set on making sure their prices cannot be matched by the other. Recently Asda went to the advertising watchdog ASA to file a complaint about a Tesco advertising campaign. In the campaign Tesco claimed that shopping with them was cheaper than shopping at Asda for over 'one million customers'. The campaign included television commercials, posters, and advertisements for a number of national publications. Asda claimed that although Tesco.com listed 31,000 products that were compared only 12,000 of those products were compared with Asda's prices, meaning that in some cases it would only be one item per basket that Tesco compared with Asda, making the whole campaign extremely misleading. Although Tesco did attempt to fight back claiming that they only compared the prices of the items that were being bought not all available items, ASA agreed with Asda claiming that the advertisement was "not clear" and "concluded the claim was ambiguous and therefore misleading." This meant that Tesco were banned from any further use of the campaign (which.co.uk). Asda now hopes to beat Tesco by becoming the UK's biggest general merchandise retailer. However this plan seems to of hit a wall after announcing that they only plan to open 2 new Asda Living non-food