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Tesco increases market share for first time in five years

Extra 228,000 shoppers visit the firm’s stores over last three months, but Asda's slide continues

Ben Chapman
Tuesday 18 October 2016 15:59 BST
Tesco begins to turn around business after five years of losing ground to rivals
Tesco begins to turn around business after five years of losing ground to rivals (Reuters)

Tesco has shrugged off its battle with Unilever over Brexit price hikes, for now at least. The nation’s largest supermarket increased its market share for the first time in five years and grew sales, which had fallen every quarter from March 2015.

An extra 228,000 shoppers visited the firm’s stores over the last three months, boosting sales by 1.3 per cent and market share to 28.2 per cent, the latest figures from industry analysts Kantar showed.

These are tricky times for Britain’s supermarkets and Tesco’s losest rival Sainsbury's till receipts edged down 0.4 per cent, although its market share also grew by a percentage point to 16 per cent as other chains struggled.

Morrisons’ sales tumbled 3 per cent after it sold its convenience stores, but this didn’t dent market share which held at 10.4 per cent.

The supermarket price war, sparked by discounters Aldi and Lidl, again hit Asda hardest – sales crashed 5.2 per cent lower at the Wal-Mart owned supermarket, continuing its woeful performance of recent years.

Aldi and Lidl yet again posted strong sales boosts, up 11.4 per cent and 8.4 per cent respectively.

Mike Watkins, Nielsen's UK head of retailer and business insight, said: “Tesco was the only one of the Big Four to see a year-on-year increase and has started to attract new shoppers again, with two-thirds of households visiting them in the last four weeks.

“They are well-placed to benefit from the ‘little-and-often’ mode of shopping behaviour which we see as a key driver of future growth across the entire industry.”

He added: “While currency-related cost price increases are casting a shadow over next year, the supermarket price war will keep retail prices in check for the time being.

“Retailers with a multi-format or multi-channel proposition are well placed to gain new shoppers and incremental spend, particularly when food sales are under increasing pressure from the discounters and now Amazon.”

Tesco said it is on track to deliver £1.2bn profits this year, despite taking hits from a damaging accounting scandal and the Unilever spat.

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