Does Tesco account for £1 of every £7 spent in the UK retail sector?

16 February 2012

"It's now the case that one in every £7 spent in retail is spent in Tesco"

Zac Goldsmith, 16 February 2012

Conservative MP Zac Goldsmith today argued that banks that were 'too big to fail' were a problem for the UK economy. As an example, he claimed that £1 out of every £7 spent in UK retail is spent in Tesco.

It is not the first time the claim has been made. The Daily Mail made the same claim on 8th January this year. The claim has in fact been mentioned several times over the past five years. Previous reporters include the Telegraph, the Guardian and BBC News.

But where has the claim come from and is it correct?

Analysis

After contacting Mr Goldsmith's office, they confirmed that he had acquired the figure from past news reports, some of which are mentioned above.

Full Fact therefore looked to official statistics to compare them to Tesco's own sales figures.

The Office for National Statistics (ONS) compile data on total retail sales in the UK on a monthly basis, and also calculate the total annual sales figures for the UK.

From this, we can see that the total annual sales in the UK for 2011 is estimated at approximately £343.3 billion for all retailing, or £303 billion if automotive fuel is excluded.

Consulting Tesco's latest annual report for 2011 revealed that, for 2010/11, Tesco's UK sales totalled £44.6 billion. A quick call to Tesco confirmed that this figure was all inclusive and thus accounted for fuel sales.

Comparing these two measures shows that Tesco's sales figures are just under 13 per cent of the UK total as measured by the ONS, which equates to £1 in every £7.7 spent. Hence rounding this figure indicates that Tesco's sales account for £1 in every £8 spent in the UK retail sector.

But given the reports date back to 2007, it is worth finding out whether they were correct at the time of writing.

The ONS's figure for total retail sales in 2007 (at 2007 prices) stood at £303.6 billion. Examining Tesco's annual report for 2007 confirmed that their UK sales total for 2006/07 was £35.6 billion. This equates to 11.7 per cent or £1 in every £8.5 spent.

If we account for the fact that the Tesco figures appear to straddle two years, the totals remain roughly the same.

The comparisons for previous years can be graphed using data from previous Tesco reports and the ONS measure:

In 1997, Tesco sales only accounted for £1 in every £15 of retail sales. In 2007, at the time of the original claims, their share was £1 in £8.5. 

Conclusion

Using this measure, the latest figures confirm that Tesco sales account for approximately £1 in every £8 of total UK annual retail spending.

It should be noted of course that the ONS figures are estimates and are not directly comparable with the Tesco sales figures. In addition, the measures are made on an annual basis but do not necessarily concern exactly the same timeframes. 

The picture painted by the figures is however indicative of a small growth in Tesco's sales share relative to the ONS' total sales measure.

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