Tesco sales rise as supermarkets log record price falls
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Version 0 of 1. Tesco’s sales are rising for the first time in a little more than a year, according to grocery market data that also reveals record price falls across the industry. Shares in the UK’s biggest supermarket rose nearly 4% on Tuesday as it emerged as the only one of the big four to achieve growth in the three months to 1 February, according to figures from Kantar Worldpanel. While Tesco’s growth was just 0.3%, it marked a strong turnaround from last month when its sales were falling by 1.2%. Analysts said the latest data suggested Tesco’s new chief executive, Dave Lewis, was making the right moves to revive the business which was benefiting from the continuation of an uptick in performance first seen in December. “Tesco results were clearly not simply a Christmas miracle caused by heavy advertising and unsustained price cuts – this looks ever more like a sustainable recovery,” Bruno Monteyne at Bernstein Research said. Morrisons also showed a marked recovery from last month with sales falling by just 0.4% compared with a 1.6% in January, its best performance since December 2013. The revival, which comes as Morrisons’ chief executive Dalton Philips serves his last few weeks at the business after being sacked last month, sent shares in the Bradford-based chain up 3.4% to 184p. “Britain’s largest 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,” said Fraser McKevitt, head of retail and consumer insight at Kantar. But he noted that Tesco’s share of the market had continued to slip, falling to 29% against 29.2% a year ago, as strong growth by Aldi, Lidl and Waitrose lifted overall sales in UK grocers by 1.1%. McKevitt said lower fuel prices and a 1.2% fall in grocery prices, the deepest since Kantar began its records in 2006, meant shoppers had the cash to buy more items. The deflation figure reflects a wave of price cuts unleashed in January by the major supermarket groups as they attempt to fight back against the rise of the discounters. Last month Asda said it would plough £300m into lowering the price of 2,500 essentials, including fruit and vegetables, milk and eggs, in the first three months of the year. The same day, Sainsbury’s announced hundreds of price cuts as part of a £150m investment this year while Tesco has cut prices on dozens of popular branded items as part of its turnaround plan. Aldi’s sales rose by 21.2% and Lidl’s by 14.2%, continuing a gradual slowdown in pace from more than 30% growth seen by both last spring, but still well ahead of the market and lifting their combined share to 8.4%, compared with 7.2% a year ago. Asda and the Co-op were the biggest losers in the face of that competition, with sales down 1.7% and 2.7% respectively. But Sainsbury’s sales fell by 1% against a 0.7% decline in the month before, meaning it relinquished its spot as the UK’s second-largest supermarket to Asda after a brief takeover at Christmas, traditionally the London-based business’s best time of year. Sainsbury’s controls 16.7% of the UK grocery market against Asda’s 16.9% share and Morrisons’ 11.1%. |