Britain's Tesco outperforming rivals, but strike threat grows

The stock was up 1% at 1147 GMT, extending 2020 gains to 23% after market researcher Kantar showed Tesco significantly outperformed its main rivals - Sainsbury's, Asda and Morrisons - in the 12 weeks to Nov. 28, winning 0.7 percentage points of market share in the period, its biggest jump since 2007. While the data showed Tesco leading the pack going into the key Christmas period, a cloud on the horizon is potential strike action which could hit product availability in stores.

Shares in Tesco rose on Tuesday after industry data showed Britain's biggest retailer had gained its highest market share since February 2019, though the threat of pre-Christmas strikes has escalated. The stock was up 1% at 1147 GMT, extending 2020 gains to 23% aftermarket researcher Kantar showed Tesco significantly outperformed its main rivals - Sainsbury's, Asda, and Morrisons - in the 12 weeks to Nov. 28, winning 0.7 percentage points of market share in the period, its biggest jump since 2007.

While the data showed Tesco leading the pack going into the key Christmas period, a cloud on the horizon is potential strike action that could hit product availability in stores. Tesco was already facing strikes by Unite union workers at four distribution centers in a dispute overpay.

It is now facing walkouts by over 5,000 members of the Usdaw union at a further nine depots - Daventry, Peterborough, Hinckley, and Lichfield in central England, Goole in northern England, Southampton in southern England, Livingston in Scotland and Magor in Wales. The Usdaw members will strike from Dec. 20 to Dec. 24.

Both unions have rejected Tesco's offer of a 4% annual pay increase. “Industrial action and possible stock shortages in stores in the week before Christmas can be avoided. It needs the company to engage positively in talks with Usdaw and we stand ready to reopen negotiations," said Usdaw National Officer, Joanne McGuinness.

Tesco says it has had made a fair pay offer and has plans in place to help mitigate any impacts. British retailers are already grappling with delays in international supply chains that are being compounded by labor shortages in domestic transport and warehousing networks, with a lack of heavy goods vehicle (HGV) drivers particularly acute.

However, Tesco said in October it was coping well.

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