Supermarkets led the FTSE 100 higher this afternoon, after figures revealed the grocery sector was in growth once again.
Morrisons' share price had recorded the biggest gains at pixel time, rising 5.5 per cent. This was on the back of Kantar figures out this morning, showing its sales had fallen 0.4 per cent, the best performance since December 2013.
Tesco's share price had climbed 2.9 per cent meanwhile, after the same data revealed it was back in growth for the first time in more than a year.
Both businesses had continued to lose market share to discount challengers Aldi and Lidl as well as John Lewis Partnership-owned Waitrose.
But the improved top line performance – along with the sector-wide improvement, with supermarket saless growing 1.1 per cent for the 12 weeks to February 1- has pleased investors.
And it was not only retailers included in the Kantar round up who have climbed today.
Online service firm Ocado's share price has risen 2.5 per cent, while high street staple (and premium food outlet) Marks & Spencer's share price jumped 3.3 per cent.
Shore Capital analyst Clive Black explained:
While we are not hung up on very short-term data, we do believe that this update has some importance because it provides perhaps the clearest indication for some time of an improvement in the trading conditions of the British grocery industry, following on as it does from the moderately encouraging BRC-KPMG Retail Sales Monitor of today, which reported that January was the second consecutive month of food sales growth.
Black notes that the sector is up against “very favourable comparatives” but still argues the case for improved fundamentals “If this trend is sustained then we should see a firming of earnings forecasts for the industry,” he added.
But it was not all good news. Sainsbury's, which swapped places with Asda to return to its position as the UK's third largest supermarket. Its share price drop by one per cent today. The share price of Asda's parent Walmart has also fallen, by 1.6 per cent.
Black said: “Given the high level of overlap, we are concerned that Sainsbury’s could be a particular victim of the improved performance and momentum from the market leader, hence our caution on the group's shares.”
He added: "Asda's slowdown in trading momentum over the last three to six months has surprised us and suggests to our minds that a combination of the improving momentum at Tesco and Morrisons is impinging upon its performance."