Britain’s beleaguered grocers gained some respite from a price war this month, as warm summer weather caused customers to splurge on ice creams and chilled drinks.
Sales across the industry rose 0.3% in the 12 weeks ended 14 August, researcher Kantar Worldpanel said recently. While discounters Aldi and Lidl continued to take business from the main supermarkets, market-leader Tesco Plc had its best performance in six months, as its sales fell just 0.4%.
Tesco’s revenue fell by less than any of its main competitors, as the retailer took advantage of its larger scale in a battle to halt the growth of Aldi and Lidl. The grocer’s revamped fresh-food ranges found their way into more than a quarter of all shoppers’ baskets, Kantar said.
“Tesco is the fastest-growing retailer in volume for most suppliers and is using this to build relationships with suppliers to ensure growing momentum," Dave McCarthy, an analyst at HSBC, said in a note.
Tesco shares rose as much as 3.4% to 164.95 pence, the biggest gain since 29 June.
Kantar’s report adds to evidence that Britons’ purchasing decisions are being driven more by the weather than the country’s decision to leave the European Union. Sales of frozen confectionery rose by almost a quarter, compared with the same period last year, the researcher said.
While grocers aren’t suffering from a Brexit hangover, they remain locked in a price war that is dragging down growth. Wm Morrison Supermarkets Plc announced price cuts on more than 1,000 lines this month.
Lidl's and Aldi’s sales rose by 12% and 10%, respectively. The increase in sales of their premium own-brand ranges demonstrates how the discounters continue to broaden their appeal to the British public.
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