The emergence of a significant number of new smaller-format grocery stores has succeeded in overhauling the UK marketplace in the past 12 months, introducing more competition than the sector has seen for many years.

That's the finding of location planning expert CACI's annual report on the UK grocery market, which has revealed a surprising glimmer of light amid the recession-hit retail sector - the small supermarket.

CACI's ProVision 2009 data reveals that Morrisons' assault on the market, through the purchase of 39 ex-Somerfield stores following the Co-Op's disposal programme, has led Morrisons to boost its presence in the south east and London. These average 10,000 square feet smaller than their usual format and some are as small as 10,000 square feet. Sainsbury's has followed suit, successfully cracking areas such as the north with 22 store acquisitions averaging 17,000 square feet below the average for the Sainsbury's estate.

Waitrose is another of the top grocers to have grasped the opportunity to reach beyond its south east heartland, acquiring 14 new stores which average more than 5,000 square feet below its typical store size.

The activity has helped Sainsbury's to make great strides forward, moving up to take pole position for market share in 13 of the UK's 121 postcode areas - five more than in 2008. Asda, although following a less aggressive expansion strategy, has nonetheless moved up to number one in 16 areas. By contrast, Tesco has slipped back from being number one in 87 postcode areas in 2008 to 84 today - some 70% of postcode areas.

Paul Langston, Associate Director for Location Strategy, CACI explains:

"For once, things are not all going Tesco's way. While it remains the UK market leader, it is being challenged on several fronts by the emerging smaller store format. In the past year we have seen an increase in the number of competing fascias in over 25% of the UK's retail centres, which is very good news for the consumer. Having proven that they can trade smaller stores successfully, Sainsbury's, Morrisons and Waitrose are likely to pursue this strategy in the coming year - opening up a new front in their battle to claw back ground from Tesco."

The emergence of a significant number of new smaller-format grocery stores has succeeded in overhauling the UK marketplace in the past 12 months, introducing more competition than the sector has seen for many years.

That's the finding of location planning expert CACI's annual report on the UK grocery market, which has revealed a surprising glimmer of light amid the recession-hit retail sector - the small supermarket.

CACI's ProVision 2009 data reveals that Morrisons' assault on the market, through the purchase of 39 ex-Somerfield stores following the Co-Op's disposal programme, has led Morrisons to boost its presence in the south east and London. These average 10,000 square feet smaller than their usual format and some are as small as 10,000 square feet. Sainsbury's has followed suit, successfully cracking areas such as the north with 22 store acquisitions averaging 17,000 square feet below the average for the Sainsbury's estate.

Waitrose is another of the top grocers to have grasped the opportunity to reach beyond its south east heartland, acquiring 14 new stores which average more than 5,000 square feet below its typical store size.

The activity has helped Sainsbury's to make great strides forward, moving up to take pole position for market share in 13 of the UK's 121 postcode areas - five more than in 2008. Asda, although following a less aggressive expansion strategy, has nonetheless moved up to number one in 16 areas. By contrast, Tesco has slipped back from being number one in 87 postcode areas in 2008 to 84 today - some 70% of postcode areas.

Paul Langston, Associate Director for Location Strategy, CACI explains:

"For once, things are not all going Tesco's way. While it remains the UK market leader, it is being challenged on several fronts by the emerging smaller store format. In the past year we have seen an increase in the number of competing fascias in over 25% of the UK's retail centres, which is very good news for the consumer. Having proven that they can trade smaller stores successfully, Sainsbury's, Morrisons and Waitrose are likely to pursue this strategy in the coming year - opening up a new front in their battle to claw back ground from Tesco."

Appendix - Top Retailers by Postcode Area

Appendix - Top and Bottom shares