Fashion chains face rising Tesco threat

Tesco is beating high street fashion retailers, including Next, on volume sales as the battle in clothing intensifies.

The supermarket group increased its market share by 60 per cent by volume in 2002 and continues to make strides. The supermarket claims to be the fastest-growing retailer in clothing by value and volume.

Tesco's volume clothing market share stood at 4.4 per cent for the 24 weeks ending June 1. Next's was 3.2 per cent, according to Fashion Trak.

The retailer is to take clothing into more stores over the next three years as it doubles Extra hypermarket numbers.

John Hoerner, former Arcadia chief and boss of Tesco's clothing operations, outlined plans to analysts last week.

The grocer is recruiting 260 specialist clothing managers, who will be in position by the autumn. Tesco has also opened a clothing warehouse in Daventry to improve product supply.

CSFB analyst Tony Shiret could see Tesco's market share by volume rising to approximately 7 to 8 per cent in the next three years.

He said: 'I think that Tesco is going to rapidly become a bigger feature in the clothing market. They could upset the entry price points of Next and Bhs, although Next is less competitive with Tesco than Bhs.'

Tesco is behind Asda's George, which has a 6.7 per cent share, itself behind market leader Marks & Spencer.

- Tesco has opened its first four c-store conversions from T&S to Express. Conversions will go on at the rate of four or five a week.