Turnround efforts by Tesco chief Dave Lewis have been boosted by the company’s best sales performance in 18 months, according to industry figures published on Tuesday.
Kantar Worldpanel, the consumer research group, said Tesco’s sales rose 1.1 per cent in the 12 weeks to March 1, making it the only one of the so-called big four supermarkets to achieve sales growth.
Tesco’s sales increase contrast with a year ago when sales were going backwards. The improvement comes as Mr Lewis is striving to turn round Britain’s biggest retailer, cutting thousands of head office jobs.
In the four weeks to March 1, Tesco’s sales rose 0.1 per cent, halting the decline in its market share.
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Bruno Monteyne, analyst at Bernstein, said Tesco was on the verge of reporting its first increase in market share for four years.
The improvement at Tesco comes as a dispute with Coca-Cola over the price charged for Schweppes drinks has seen the soft drinks pulled from its shelves.
Tesco’s acceleration also compares with a 2.4 per cent decline at Asda in the four-week period.
Last month, the UK arm of Walmart complained of a blizzard of vouchers being issued by rivals, including Tesco, which it has described as the supermarket equivalent of quantitative easing.
Sales at J Sainsbury fell 0.6 per cent in the four-week period, while Wm Morrison’s sales dropped 2.8 per cent, ahead of Britain’s fourth-biggest supermarket chain reporting its full-year results on Thursday.
Waitrose also saw its sales of groceries decline 1.2 per cent in the four weeks to March 1, the first time it had lost share for about six years.
Britain’s biggest supermarkets are engaged in a vicious price war as they cut prices in an effort to stem the growth of no-frills discounters Aldi and Lidl. Lidl’s growth overtook that of Aldi for the first time in the four-week period.
Kantar said prices for food and groceries were also falling at their fastest rate since it began measuring them a decade ago, as commodity price falls and the price battles between the big grocers kick in.
It said grocery price deflation was at a record decline of 1.6 per cent, saving shoppers £400m in the 12 weeks to March 1.
Ocado, the online supermarket chain, said on Tuesday that falling food prices were behind an underlying reduction in the average size of its order of 1.6 per cent. The average order size fell 2.4 per cent, including the impact of its non-food sites Fetch, for pet products, and Sizzle, for cooking and dining products, where average orders tended to be lower.
Despite the decline in the average order size, sales including VAT but excluding the company’s partnership with Morrison rose 15.2 per cent, in line with expectations. Including the Morrison partnership, gross sales climbed 19.2 per cent in the 12 weeks to February 22.
Date: March 10, 2015