God I hate Tesco. On an autumn weekday you cannot do much worse than bowl up in the chilled aisle (of any British Supermarket). But if there’s one reason we fell in love with the big boys of retail it was for the choice and convenience that they offered us. After all under what other roof can one find both tofu and toilet paper? But this year, with disruption to just-in-time supply chains, CO2 shortages and rising inflation, the model is being pushed to the limit.

Things have been different. Cast our minds back to the mid noughties, supermarkets were stuffed with BOGOF (Buy one get one free) deals at the end of aisles and crammed with multibuy offers and extra value “family” packs. In my home town, Didsbury, on the edge of Manchester, the Tesco Superstore was (and still is) the local landmark, thanks to the iconic logo atop the old post office clock tower that once occupied the site. It could be seen everywhere within a mile.

Of course it wasn’t just the skyline that Tesco dominated. It had a firm grip on our wallets too. In 2007, for every £8 spent on all retail shopping in the UK, Tesco scooped a massive £1 and grabbed nearly a third of all grocery sales.

But in the years following the Great Recession in 2009, Britain’s traditional large grocers were blown off course by the rapid emergence of discounters, namely German giants Lidl and Aldi. As shoppers migrated for unbranded products at fractional prices, the mainstream offer had to change. Enter the stealth phenomenon known as ‘Shrinkflation. Instead of price increases, shoppers became accustomed to products reducing in size but not in price.

Consumer behaviour and shopping patterns have adapted as well. Unable to outmuscle the discounters on out of town sites, in the last decade supermarkets have taken the battle to the high street. Despite a brief resurgence during the pandemic lockdowns, the weekly shop has been in decline and top-up “walk in fridge” shops have taken off.

The proof is in the statistics. In the last 5 years Tesco has seen a net increase of 60 “Express” format stores to its empire, only adding five large supermarkets in the same period. In addition, the company announced in May that its 147 Metro stores, which average around 1000m2, would all be rebranded with 89 converting to Express. And its not just happening in blue and red. In April, Sainsburys set out its plan to open 25-30 Sainsbury’s Local shops over the next three years.

Just last week, against the backdrop of a possible takeover of Britain’s fourth largest store, Morrisons by a consortium of an American private equity firm, its Chairman, Andrew Higginson declared on the Today programme that the UK “is blessed with good supermarkets” which make them “attractive” to overseas investment. Indeed if shareholders approve the deal, it will be the second of large grocer in the UK to be change ownership in a year after the Issa brothers purchased ASDA in May.

Yet perhaps as a reflection of how closely entwined food is with a nation’s culture, this “blessing” has transferred less well overseas. Only one of Britain’s “Big Four” has taken its brand directly overseas. You’ve guessed it – Tesco. But of the 12 markets it has entered it now remains in just four. Most recently the Tesco brand ceased trading in Thailand and Malaysia. While last month, household name Marks & Spencer cited Brexit as its reason for pulling the plug on 11 of its stores in France.

This marks a sharp contrast with some of the world’s multinational food retailers. Take for example French giant Carrefour, which has operations in over 30 countries from Poland to Pakistan, at over 12,000 locations, although its last UK branch closed more than 30 years ago. Japanese owned American convenience store chain 7-Eleven is now recognisable in four continents and with a mind boggling 71,000 stores worldwide, but not yet in the UK.

This perhaps demonstrates the uniqueness and resilience of the UK grocery market. Foreign investment and ventures do come in but when they do they stick with known established brands, for example when Walmart acquired ASDA. And even German-rooted Aldi hasn’t shot up to fifth place and doubled its market share since 2010 without channelling its offer for the UK consumer, in its own words “Championing British Quality” with its lorries even draped with Union Jacks and strawberries.

Today Britain’s so four powers, Asda, Morrisons, Tesco and Sainsburys, still pack a large punch with a combined slice of just over 65%, but with this down nearly 10% since 2010 the struggle is on.

But it may not just be the discounters, but a trend back towards independent stores that could drive this competition in the future. In the era of somewhat sporadic supply in superstores, I have been surprised as to how reliable my local independent convenience store has been, both throughout lockdown earlier this year and last which saw essentials such as tissues and pasta disappear from shelves and in the more recent spate of HGV shortages and interruptions in supply chains. Here’s the thing. At the time of writing my local Tesco does not stock pasta of any type. Sainsburys a few doors down does, but only has two types of its own brand and has run out of it all except for dry cannelloni, the independent store on the same street has around 10 different varieties of two different brands (No it isn’t an Italian shop but Arabic) and is well replenished. The difference in price is a matter of pence. Yet I confess, I frequent Tesco far more often.

So what keeps me (and presumably most of the country) coming back to the big boys? It has to be the power of marketing and brand loyalty. Tesco certainly thinks so. Towards the end of last year it saw the revival of lower “Clubcard prices” as an added incentive for its loyalty programme, which boasts 20 million users on the scheme.

Either way whether of the colour of the store on your high street is blue, orange or even blue and yellow (Lidl), chances are you’ll know what its name is many yards before you reach the entrance.

Main image credit: Anne Burgess

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