Tesco’s bounce back puts the pressure on its rivals

Market researcher Kantar Worldpanel said Tesco’s sales increased 3.3 per cent in the 12 weeks to January 20, giving it a market share of 30.4 per cent and putting its rivals under press- ure.

Tesco launched a £1bn plan in April to revive UK sales by investing in more staff, revamped food ranges, refined marketing and smartened stores that give more space to food.

“These positive results are a sign of stabilisation for Tesco as the retailer gets back on track with its customers,” said Kantar director Edward Garner.

“This improvement has put some pressure on the rest of the big four, with Morrisons in particular suffering.”

Britain’s number four grocer Morrisons saw sales fall 1.7 per cent and its market share decline by 0.6 percentage points.

Number three player J Sainsbury achieved sales growth of 3.2 per cent, but its market share ticked down 0.1 percentage points to 16.9 per cent.

Sales at number two grocer Asda rose 2.1 per cent, but its market share fell by 0.2 percentage points to 17.6 per cent.

Tesco, Sainsbury and Morrisons all updated on Christmas trading this month.

Tesco and Sainsbury’s argued over who had won Christmas, while Morrisons was a clear laggard.

Kantar said that the discounters Aldi and Lidl strongly outperformed the market with sales growth rates of 28.2 per cent and 10 per cent respectively.

At the premium end, Waitrose continued to perform well, with sales growth of 8 per cent echoing its record Christmas out- come.

The Co-operative’s sales rose 0.9 per cent.

Kantar highlighted that a widening gap between overall grocery market growth of 3.3 per cent and grocery inflation of 4.9 per cent is causing a squeeze on shopping budgets.

This is an increase on the 4.5 per cent reported in the previous period and continues a rising trend since September last year.

In the last week of the 12-week period (on January 15) the Food Safety Authority of Ireland found horse DNA in beef burger products sold by Tesco, Lidl, Aldi and Iceland.

Kantar made no comment on any impact this may have had on sales.

Mr Garner added: “It is worth noting the improved performance from The Co-operative this month.

“This growth contrasts with the declines posted throughout 2012 and could be a positive step for the grocer.”