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Tesco hit by further blow in stores war

The dominance of market leader Tesco has continued to wane as competition between low-cost supermarket rivals rages on, industry figures showed.

Tesco's market share has slipped from 30.3% this time last year to 29.7% in the 12 weeks to February 19, a further decline on the 29.9% reported by Kantar Worldpanel last month.

The drop in Tesco's market share to a level last seen in May 2005 came as low-cost chains saw their share of the market grow with Iceland up from 2% to 2.1%, Aldi up from 3.1% to 3.6% and Lidl up from 2.4% to 2.6%.

Waitrose saw its share rise this month to 4.5% from 4.4%, which is an all-time record for the retailer after it stepped up its store expansion.

Meanwhile, the Co-operative saw its share fall to 6.3% in the 12 weeks to February 19 from 6.7% in the same period last year.

The figures will fuel speculation that the Co-op's food division is struggling to integrate the 800 Somerfield stores it acquired in 2009.

The Independent newspaper yesterday reported figures showing a drop in like-for-like food sales of 3.4% in the former Somerfield stores over the eight weeks to February 25, compared with a rise of 0.1% at the Co-op's own grocery stores.

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The newspaper also reported that it had seen documents which said complaints about the staff's attitude "continue to be in the 100s" each week at the Co-op's 3,000 store food business, with swearing, overcharging of customers due to misleading information and concerns over food safety among the issues.

A spokesman for the Co-operative group said: "We don't comment on leaked information.

"We will be announcing the group's annual results at the end of March, which will demonstrate the progress we are making to transform and modernise our food business."

Meanwhile, Sainsbury's recovery has continued with a 0.1% year-on-year increase in market share to 16.6%, albeit down from 16.7% in January.

Asda, the second biggest UK grocer, remained consistent with a 17.5% share of the market, while Morrisons was down 0.1% on a year ago to 12.2%.

Kantar said that grocery inflation was 5.5% for the 12 week period, a decrease on the 5.7% reported in the last 12 week period and a decline from the peak of 6.2% reported for November last year.