Tesco recovers from 18 months of slow sales
TESCO has posted its strongest performance in 18 months, with sales up 1.1 per cent compared with 2014, according to industry data for the 12 weeks ending 1 March.
The latest grocery share figures from Kantar Worldpanel suggest that the major overhaul of strategy at the UK’s biggest retailer by new chief executive Dave Lewis is slowly working.
Since Lewis joined the beleaguered retailer last year he has reduced the price of key products in a bid to win back deserting customers and rebuild Tesco’s image.
“Increasing sales have helped Tesco arrest its falling market share, which is down just 0.1 of a percentage point compared with last year,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
Tesco’s resurgence has impacted on Asda, which competes for many of the same shoppers and has seen sales fall by 2.1 per cent, taking its market share to 17 per cent.
German discount supermarket chains Aldi and Lidl recorded sales increases of 19.3 per cent and 13.6 per cent respectively.
However, the explosive growth of the two discounters has been slowing in recent months, with Aldi recording the slowest rate of expansion since June 2011.
The supermarket price war has driven grocery deflation to a record low of minus 1.6 per cent.
“All of the major supermarkets are cutting prices to win shoppers, especially within everyday staples such as eggs, vegetables and milk. Retailers are focusing their efforts on simple price cuts rather than complicated ‘multibuy’ deals,” said McKevitt.
Morrisons and Sainsbury’s both fell behind the market average, with sales falling for the period by 0.4 per cent and 0.5 per cent, respectively.
Sales at upmarket grocer Waitrose increased by 4.9 per cent for the latest period, which is thought to be down to the premium chain selling more products on promotion than it has done historically, in an effort to be more price competitive.