Supermarkets force price issue. (MW Comment).

Tesco's target of 20% chart share within 18 months should leave all of us in no doubt--the supermarkets are here to stay.

Indeed, the time will soon come when supermarkets will claim 50% of the chart music market. Tesco is nothing if not determined and, if does not hit its target by December 2003, it is sure to do so very soon after.

And, as their entertainment director Steve Garton indicates, the competition is hotting up. Asda, traditionally the biggest CD-selling supermarket, claims it has around 8% of the total market and Sainsbury and Safeway are battling away too. If they expand the market, that can only be welcomed. But, what remains a key issue is the fact that the supermarkets fight almost solely on price.

As the likes of Tesco take an increasing slice of the music cake, their growing power has wider implications on the music business: as labels come under ever greater pressure to bear the costs of the chains' price-cutting, as music retailers try to sustain their competition with more realistic pricing. And as the industry as a whole watches more and more of its sales channelled through mass-market operations which cherry-pick the very biggest sellers--at the lowest possible price.

The ...