Tesco quarterly sales show sign of turn around following profit warning

 
Kasmira Jefford
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Tesco’s market share now stands at 29.1 per cent (Source: Getty)
Tesco has enjoyed its best quarterly sales performance since June, according to the latest industry data, giving investors in the troubled supermarket chain some reason to cheer following last week’s profit warning.

Sales fell by 2.7 per cent in the 12 weeks to 7 December, a slowdown on the 3.7 per cent decline recorded in the last three months to 9 November, Kantar WorldPanel said yesterday.

The retailer’s market share now stands at 29.1 per cent, down 0.8 percentage points from the same time last year but an improvement on last month’s 28.7 per cent

“Although we have not seen the full new Tesco strategy, it has been making efforts to improve staffing levels and availability; this is evidently starting to slow the slide and should mean Christmas is not the disaster some had predicted,” Bernstein analyst Bruno Monteyne said.

The overall grocery market returned to marginal growth of 0.1 per cent after last month’s first ever decline – of 0.2 per cent – since Kantar began recording data in 1994.

But analysts cautioned that the growth may have been skewed by Black Friday weekend, when supermarkets boosted sales with offers on non-food products such as Kindles and food mixers. Kantar said overall prices fell by 0.7 per cent over the period as grocers slashed prices and increased promotions, saving shoppers £182m over the last 12 weeks alone.

Discounters Aldi and Lidl enjoyed the fastest growing sales of any retailers at 22.3 per cent and 18.3 per cent respectively. The pair hit a record combined market share of 8.6 per cent.

Meanwhile Waitrose also performed well as it benefitted from customers trading up at Christmas, with sales six per cent ahead of last year.

Asda’s sales dipped by one per cent taking its share down to 16.7 per cent.

Sainsbury’s and Morrisons both lost share, with sales declining by 1.8 per cent and 3.2 per cent respectively.

“[Morrisons’] lack of significant non-food muscle in the offer is likely to have impacted footfall around the week of Black Friday,” Jefferies analyst James Grzinic said.

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