Tesco resurgent as sales growth strongest for three years

Tesco’s resurgence is continuing as the grocer recorded its best quarterly sales rise in more than three years, according to latest industry figures. In the 12 weeks to October 8, the amount Tesco took at the till rose 1.4% year-on-year, Nielsen reported today.

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The last time the increase was higher was in autumn 2013, when the grocer’s sales rose 2.3% in the 12 weeks to September 14.

“Tesco has started to attract new shoppers again, with two thirds of households visiting them in the last four weeks,” says Mike Watkins, Nielsen’s UK head of retailer and business insight.

According to Kantar, the grocer has also increased its market share 0.1% to 28.2% during the 12 weeks to October 9, representing its first market share growth in five years.

Tesco was the only one of the big four to see an increase in sales in the latest period, as Walmart-owned Asda suffered again.

Tesco’s recovery under boss Dave Lewis, which has focused on streamlining the business and focusing on retail basics, was reinforced earlier this month when it reported a 0.6% rise in UK half-year like-for-likes.

Watkins added: “They (Tesco) are well placed to benefit from the ‘little-and-often’ mode of shopping behaviour which we see as a key driver of future growth across the entire industry.”

Sainsbury’s sales in the 12 weeks slid 0.6%, while Morrisons’ sales fell 3.2%. Asda ‘s woes continued with sales falling 5.1%, according to Nielsen.

Aldi remained the pace setter as sales jumped 13.2%. German discount rival Lidl’s sales increased 4.1%, according to the figures.

Watkins said overall industry momentum was driven by further price cuts despite a slowdown due to the September heatwave.

He added: ”Whilst currency related cost price increases are casting a shadow over next year, the supermarket price war will keep retail prices in check for the time being.

“Retailers with a multi-format or multi-channel proposition are well placed to gain new shoppers and incremental spend, particularly when food sales are under increasing pressure from the discounters and, now, Amazon.”

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