Cantillon: Tesco empire strikes back in store wars

After being recently toppled as Ireland's largest grocer by market share, Tesco has again drawn level with SuperValu at the top of the league table, with both companies at a share of 25 per cent in the latest Kantar Worldpanel ratings.

The battle to be biggest is important for the companies in terms of bragging rights. While engaged in the battle, however, both Tesco and SuperValu should watch out for Dunnes Stores, which has overtaken both in the market that matters most: Dublin.

Dunnes now has more than a quarter share of Dublin market. Despite the economic recovery, the overall grocery market is flat in value terms. In Dublin, sales are climbing and as the jobs market loosens up further that growth will accelerate.

Dunnes posted the strongest growth in the latest Kantar figures, fuelled by its strength in the capital. SuperValu is still learning the Dublin market, where it got a foothold when it acquired Superquinn.

Aldi and Lidl's growth is still impressive, but slowing, and dipped into single figures for them both for the first time in the latest Kantar figures.

And then there is Tesco. After a torrid couple of years of sales declines and corporate upheaval it is finally starting to show signs that it might be on the way back.

Dave Lewis, the new group chief executive, appears to have found a formula to stanch the alarming loss of customers that has afflicted its Irish and UK operations: fewer product lines, keener prices on basics and a return to customer-service values.

The man who will have the most impact on Tesco's turnaround strategy in Ireland, new UK and Ireland boss Matt Davies, started work only yesterday. In his previous role running Halfords he boosted sales by boosting customer service. He will surely try to do the same at Tesco.

Better service may yet figure alongside price as a priority for Irish shoppers as the stores war intensifies.

Tesco hasn’t gone away, you know.