Tesco is dominant but the competition is getting stronger

Its share of UK supermarket sales rose to 30.6% in the 12 weeks to 29 January, up from 30.5% in the previous quarter, according to market research firm TNS.

Tesco has had a successful year - its market share up from 29% a year ago.

The latest figures also revealed that Sainsbury's is continuing to make up ground on second-placed Asda.

Still dominant

Sainsbury's market share rose from 16.2% to 16.3% over the period, while Asda's inched down from 16.7% to 16.6%.

Sainsbury's fortunes have improved significantly over the past year under the leadership of chief executive Justin King.

SUPERMARKET SHARE Tesco: 30.6% Asda: 16.6% Sainsbury's: 16.3% Morrison's: 11.1% Somerfield: 5.4% Waitrose: 3.7% Iceland: 1.8% Source: TNS

A year ago Sainsbury's was lagging its rival - owned by the US retailer Wal-Mart - by a full 1%.

"Whilst Tesco remains dominant there are signs that it is experiencing increased competition," said Edward Garner, a TNS spokesman.

"It is still growing, but the year-on-year share increase is below the average we were seeing last year."

Morrison's market share fell from 11.3% to 11.1% over the period, having begun the start of 2005 at 12.4%.

The firm has endured a difficult time since its purchase of Safeway in 2004 and has been squeezed by its rivals.