Tesco was the only one of the UK’s four biggest supermarkets to increase sales in the last three months, showing that efforts by new chief executive officer Dave Lewis to revive the business are starting to take hold.
Tesco’s sales rose 1.1 per cent in the 12 weeks ended 1 March, researcher Kantar Worldpanel said in its regular monthly report – the strongest performance for 18 months.
Revenue declined at all three of its largest competitors, led by a 2.1-per-cent decline at Asda.
"Among the big four supermarkets, Tesco has been the standout retailer,” Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said in an emailed statement. “This resurgence has impacted Asda, which competes for many of the same shoppers as Tesco.”
Tesco shares rose as much as 1.3 per cent in London. The Kantar report provides a boost for Lewis, who is shutting dozens of unprofitable stores and plans to move the company’s head office as part of efforts to revive the business. To win back customers, Lewis has lowered prices on hundreds of branded goods and increased the number of staff in stores at peak times.
The sales increase helped Tesco to limit its market-share loss in the 12-week period to 0.1 of a percentage point, Kantar said. The grocer had 28.7 per cent of the market as of 1 March, according to the researcher.
Revenue at Morrisons and Sainsbury's contracted by 0.4 per cent and 0.5 per cent, respectively, in the 12-week period, Kantar said. Morrisons is due to report full-year earnings on 12 March, with David Potts scheduled to start as the company’s new CEO the following week.
Sainsbury's is scheduled to publish fourth-quarter sales on 17 March.
Deflation continued in the grocery industry in the 12-week period, with prices dropping by 1.6 per cent on a like-for-like basis compared with a year earlier, Kantar said. That followed a record fall of 1.2 per cent in the 12 weeks through 1 February.
News by Bloomberg, edited by ESM
