Tesco shares hit by concerns it is losing sales war with discounters

FEARS that Tesco is struggling to fend off the advances of the German discounters sent the UK’S biggest supermarket sliding to the bottom of the FTSE 100 leaderboard.

As Tesco reportedly explores the launch of its own budget store to take on Aldi and Lidl, Barclays found that it had ceded ground to all its major competitors. Tesco’s performance has also deteriorated against the discounters this summer.

Aldi and Lidl have grabbed £582m in sales from its larger rivals in the last year, with Tesco taking close to a £56m hit in the past 12 weeks. Analyst James Anstead argued that a revamp of its private label ranges could be impacting its market share.

Signs of Tesco’s defences against the discounters weakening knocked the grocery giant 8.3p to 249.9p, while Morrisons slipped 2.6p to 266.1p despite its losses against its budget rivals slowing.

Elsewhere, Apple chip maker IQE recovered from a 9.6pc plunge after its interim pre-tax profits took a 21pc hit from currency fluctuations and rising costs ahead of production starting at its Newport foundry. Shares recovered to close just 1p lower at 103p as investors warmed to its chief executive Drew Nelson’s prediction that the Welsh company’s investments would drive “strong increases” in revenue and profitability.

Share buyback programmes at struggling software giant Micro Focus and building materials firm

CRH boosted the two blue-chip firms 37.5p to £13.20 and 20p to £26.27, respectively. Bookie GVC gave up a 4.5pc gain despite Morgan Stanley initiating coverage with an “overweight” rating. Analyst Jamie Rollo argued that it has a “strong starting position” in the race to tap the newly liberalised US sports betting market but GVC closed 1p down at £11.

Intu Properties edged up 0.7p to 161.8p after Berenberg initiated coverage of the shopping centre owner with a “buy” stamp. City analysts gushing over Centrica failed to boost the British Gas owner as its early gains fizzled out. Citi called the FTSE 100 energy giant a “diamond in the rough” but Centrica climbed just 0.9p to 142.85p. On the junior market, telecoms minnow Toople soared 0.7p to 0.9p, a 363pc surge, after bagging a contract with a “wellknown” undisclosed reseller.

A sour start to trading on the FTSE 100 was worsened by the pound bouncing back after EU chief negotiator Michel Barnier said that it was prepared to offer the UK a unique deal. Resurgent sterling touched back over the $1.30 mark against the dollar on the comments, a 0.9pc jump, while commodity stocks dragged the UK’S blue-chip index to a 54.01-point loss at 7,563.21.