Tesco market share down, launches own 'Hudl' tablet computer - UPDATE

24th Sep 2013 12:10

On the day Tesco made its first foray into the technology market with the launch of its own tablet computer, the supermarket's market share was revealed to have shrunk badly in the last three months against the other big four supermarkets. The FTSE 100 group was one of the big losers, seeing its market share fall to 30.2% in the 12 weeks to September 15th from 30.9% a year before, according to new data from Kantar Worldpanel.However Tesco's focus was split on Tuesday as it launched its own tablet computer, the 'Hudl', to help push its multichannel strategy.Tesco said it had designed the seven-inch device, which will run on Google's Android operating system, from scratch to be appealing to those who found new technology intimidating or too expensive. Retailing for £119, or under £100 with Tesco Clubcard discounts, the device has been designed to help customers instantly access the supermarket's full range of digital services, such as online grocery ordering, Blinkbox movies and TV, music and its Clubcard TV service - all via a big Tesco launch button on the home screen.Chief Executive Philip Clarke said: "Being online is an increasingly essential part of family life and whilst tablets are on the rise, usage is still quite limited. "We feel the time is right for Tesco to help widen tablet ownership and bring the fun, convenience and excitement of tablets to even more customers across the UK. The digital revolution should be for the many, not for the few."The device, which was manufactured by Chinese technology company Wistron, will go on sale from September 30th in around a thousand Tesco stores and online. The timing of the launch coincided with the release of unflattering figures from retail market researchers Kantar. Kantar noted that Sainsbury's was the only big four grocer to increase its market share over the past year, growing from 16.4% to 16.6% and recording market-beating growth of 5.1%. Edward Garner, Director at Kantar Worldpanel, said price match promotions such as Asda's 'Price Guarantee', Sainsbury's 'Brand Match' and Tesco's 'Price Promise' had conspired to make price "less of a differentiator" so that shoppers cannot be convinced to switch outlets based on cost alone." In this light, the Hudl could be seen as such a differentiator and is not the first such foray for Tesco, according to Brenda Kelly, technical analyst at IG, as its credit cards, petrol stations and clothing indicate."The company feels that has now spotted a gap in a highly competitive market and is choosing to capitalise on the upswing in demand. The arrival of the Hudl, their alternative tablets to the more expensive and fashionable Apple iPad, puts Tesco in direct competition, certainly price-wise with the likes of the Google Nexus 7 and the Amazon Kindle Fire.""Given the fall back in PC sales, this can in many ways be seen as a savvy move for investors to garner a piece of a growing, competitive industry particularly in light of the spectacular fall from grace witnessed by shareholders earlier this year as Tesco admitted defeat and exited the US grocery market.Kelly pointed out that Tesco's share price is currently up 11.38% in the year to date, having recouped much of the 16% decline it suffered over the course of eight previous months.She added that the jury was out whether or not Tesco can succeed with Hudle: "Tesco's CMO states that the product is commercially viable so the potential profit margin on the product will be something to watch."On Tuesday Tesco shares were up initially but dropped minimally on the Kantar news to stand at 374.1p, down 0.5% on the day, at 13:50. OH