Recession: Behind the headlines

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Seeing Tesco at the bottom of a league table is a bit like watching Manchester United get caught in a relegation scrap. You have to pinch yourself. But the figures, surely, do not lie. Of the major supermarkets, Morrisons seems to have had the best Christmas with like-for-like sales, though not yet published, expected to be about eight per cent higher. Asda is in second place with 6.7 per cent and Sainsbury's next with 4.5 per cent. Tail-end Tesco could only manage 2.5 per cent. It has been many years since Sainsbury's showed its great rival a clean pair of heels.

What gave Tesco the edge during the boom times now appears to be holding it back. The policy of rapid expansion beyond its traditional food and drink core range put the frighteners on the rest of the high street. Tesco seemed capable of selling virtually anything - from divorce kits to plasma TV screens - for less than anyone else. But in these stunningly different times the non-food empire is now a lead weight holding Tesco back. Morrisons and Asda - and to a lesser extent Sainsbury's - have brilliantly tapped into the hunkering-down mentality of recession-hit Britain.

Tesco took a different approach, deciding to mimic the likes of Aldi and Netto with its own range of discount brands such as Countrybarn cornflakes. Analysts are now calling this Tesco's first major error in a decade. They will not see it like that at Tesco headquarters in Cheshunt and it will take more than one bad Christmas to bring Tesco down.

What cannot be predicted yet is whether this is a blip or the first signs of a long-term decline. You would no more bet against Sir Terry Leahy than Sir Alex Ferguson, but for the first time this millennium the supermarket sweep is a proper four-horse race.