Tesco returns to sales growth for first time since January 2014

An additional 236,000 shoppers visited Tesco stores in the last 12 weeks and sales edged up 0.3%, Kantar grocery share data showed

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The Independent Online

Tesco grew sales in January for the first time in a year, according to the latest supermarket data.

The injection of sales pace will come as a relief for under pressure Tesco chief Dave Lewis, who is steering the retailer under the weight of investigations by the Serious Fraud Office, Financial Reporting Council and the Groceries Code Adjudicator over the £263 million accounting scandal and alleged supplier abuse.

Tesco shares rapidly rose 2 per cent to 238.2p as Kantar Worldpanel revealed sales increased 0.3 per cent in the 12 weeks to 1 February, while Asda overtook Sainsbury’s to regain its place as the country’s second-biggest grocer.

It comes as Aldi and Lidl’s attack on the Big Four supermarkets started to slow although the German discounters continued taking customers away from Asda and Sainsbury’s.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "Britain’s biggest retailer is bouncing back from a tough year, with Dave Lewis’s efforts to overhaul the supermarket attracting an additional 236,000 shoppers into its stores in the last 12 weeks.

"Despite the increase in sales, Tesco’s overall market share fell to 29 per cent down by 0.2 percentage points compared to last year."

Clive Black, retail analyst for Shore Capital, suggested: "The Kantar data is good news for British grocers in that it records expansion after a sustained period of decline.

"Within that it is very notable that Tesco UK has recorded growth, noting favourable comparatives, and this should put a spring in the step of Dave Lewis for sure. The cut in branded prices in January seems to have gone down well with shoppers."

 

However, some analysts said Tesco’s data was flattered by the unprecedented Black Friday sales, which saw shoppers fighting over discounted televisions and appliances.

Investors were also heartened by Morrisons’ recovery.

Shares rose 5.8 per cent go 188.3p after the industry data revealed a shallower decline in sales, down 0.4 per cent, at the grocer, which is currently on the hunt for a new chief executive.

Aldi and Lidl grew 21.2 per cent and 14.2 per cent. But this is much slower than previous years. At the same point last year, Aldi was growing by 32 per cent and Lidl 17.2 per cent.

Black said: "We have talked about the free lunch coming to an end for Aldi and Lidl and whilst still gaining share and so outperforming, the slowdown in momentum is also noteworthy."

Elsewhere in the data, Waitrose also performed strongly, growing sales by 7.2 per cent, staving off attempts by Aldi to overtake it as the UK’s sixth biggest retailer.

Kantar also said the impact of Aldi and Lidl undercutting the market with cheap prices meant grocery inflation was also down for its 17th successive period, off 1.2 per cent for the 12 weeks to 1 February the average price of milk and bread fell.

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