Sales at Tesco are growing at their fastest rate in three years - but Morrisons and Asda are still suffering

 
Emma Haslett
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Tesco's turnaround continues apace. (Source: Getty)

The supertanker that is Tesco continues to change its course, after new figures suggested its sales rose to their highest in three years in the last quarter.

Data by Kantar Worldpanel showed Tesco sales rose 2.2 per cent in the 12 weeks to 6 November, putting its market share at 28.2 per cent - up from 27.9 per cent during the same period last year. Last month the same figure showed Tesco had gained market share for the first time in years - so this is encouraging news.

Meanwhile, sales at Waitrose rose three per cent, while sales at Iceland rose 8.3 per cent.

Discounters Lidl and Aldi continued on their path to grocery greatness, with sales rising 6.1 per cent and 10.2 per cent respectively. That puts Lidl's share of the grocery market at 4.6 per cent, up from 4.4 per cent last year, while Aldi has a 6.1 per cent slice, up from 5.6 per cent last year.

However, things were less encouraging for Asda, where sales fell five per cent, while at Morrisons they dipped 2.4 per cent, and at Sainsbury's they fell 0.7 per cent. In August Asda posted its worst quarterly performance on record.

The news caused Tesco's share price to rise 3.2 per cent to 212.4p, while Morrisons rose 2.9 per cent to 218.8p (investors had clearly been bracing themselves for worse news).

"Tesco’s 2.2 per cent growth is a considerable improvement on the numbers it was delivering this time last year, and indeed in 2014," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

"Most of the gains were made through its own-label products, both at the cheaper and more premium ends of the price spectrum."

But the market is still rocky for grocers, most of whom have spent the years since the financial crisis battling the rise of the discounters.

“Grocery prices have now been falling continuously since September 2014 and on a like-for-like basis goods are still 0.5 per cent cheaper than last year, although this does represent a significant reduction in the rate of deflation since this summer," said McKevitt.

"We’re likely to see prices starting to creep up again in December, unless retailers choose Christmas to unleash a new round of price cuts. Although it’s tempting to link any potential price increases to Brexit and the devaluation of sterling, it’s worth remembering that deflation has been easing since December last year, well before the referendum.”

Still, there's one war Aldi and Lidl can't win: the supermarket Christmas ad war. To take your mind off things, here's this year's offering from Sainsbury's (or you can see this year's best offerings here).

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