Tesco Plc’s sales growth outpaced its main U.K. rivals in the last month as the country’s biggest grocer continued its revival in the face of a squeeze on disposable incomes.
Separate reports from researchers Kantar Worldpanel and Nielsen both pointed to a strong month for the market leader, pushing its shares up the most in more than a month.
Tesco sales rose 3 percent in the 12 weeks ended Aug. 13, Kantar said, while Nielsen put the gain at 3.2 percent. Growth exceeded its main competitors as the broader grocery market slowed due to weak sales of barbecue food and ice cream in cooler summer weather.
Clear Winner
“Tesco was the clear winner of the Big Four,” HSBC analyst Dave McCarthy said in a note. “It continues to lengthen its lead and its importance to its supply base.”
The data provides a further boost for Tesco Chief Executive Officer Dave Lewis, who is heaping pressure on rivals by using the company’s vast buying power to resist inflationary pressure. Tesco has raised prices less than competitors since Britain’s vote to leave the European Union hit the pound, pushing up the cost of imported produce.
The grocer’s shares were up 3 percent at 182.2 pence as of 9 a.m. in London, the third-biggest gain in Britain’s benchmark FTSE 100 Index.
Total U.K. supermarket sales grew 4 percent in the month, boosted by continued strong growth at discounters Aldi and Lidl, Kantar Worldpanel said. The defensive nature of the industry has come to the fore in recent months, as a squeeze on disposable incomes has seen fragile demand for fashion and big ticket items weaken.
News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.
