Take Tesco’s lead, prepare for a recession that will dwarf the financial crash

You remember 2008, of course? Leona Lewis was everywhere with Bleeding Love. The Spanish started dominating football with a string of victories that saw them lift the Euro 2008 trophy. And as we entered the end of the Bush administration, the global financial crash (GFC) smashed apart the world economy and everything turned to piss.

There are so many narratives to weave into that potent little period of time between the dramatic fall of Lehman Brothers in September and our gradual escape from recession a year or so later. Nestled somewhere in the middle of all of that was the bruising story of what happened to Tesco.

Traditionally a beneficiary of tough times, Tesco took a beating during the GFC because times had changed. Specifically, the two mighty German discount retailers – Aldi and Lidl – had established themselves in the UK by 2008 and both operated brands built on value, private labels and no-nonsense. Perfect fodder for a recessionary British shopper suddenly looking to save money.

You can be a master of negotiations. Have the biggest, strongest brand in the category. Enjoy double-digit growth. None of it matters.

In the space of 18 months, Tesco lost a full percentage point of market share with much of it ending up with the German discount duo. That might not sound much. But in a relatively stable category where a single percentage point of share is worth almost £2bn, you can imagine how much impact it had on the people at Tesco.

And in many ways the GFC moment precipitated the decade that followed. From a high point of almost a third of all grocery sales in the pre-GFC era, Tesco’s market share steadily fell to its current level of 27%. Meanwhile, Aldi and Lidl’s combined share rose during the same period from barely a rounding error at the bottom of the chart to 13% of the market.