Tesco back in growth, although market share falls

Tesco has returned to growth for the first time in over a year, according to the latest market research by analyst Kantar Worldpanel.

The supermarket has increased sales by 0.3% compared to this time last year, the first increase since January 2014.

“Britain’s largest retailer is bouncing back from a tough year, with Dave Lewis’ efforts to overhaul the supermarket attracting an additional 236,000 shoppers into its stores in the past 12 weeks. Despite the increase in sales, Tesco’s overall market share fell to 29%, down by 0.2 percentage points compared to last year,” Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explained.

The news comes after Tesco announced the closures of 43 unprofitable stores throughout the country in a cash savings bid. And despite recent controversy, the supermarket owned the biggest share of customer spend, with Asda taking home the second-largest share.

Kantar reported the overall grocery sector was growing at 1.1%, the fastest rate since June last year, a period of intense competition

“All of the major grocers have continued to compete fiercely on price, leading to like-for-like grocery prices falling by 1.2%. This is another record low, saving Britain’s shoppers £327 million over the past 12 weeks.

However, the big four supermarkets are still lagging behind discounters Lidl and Aldi.

McKevitt explained: “Early results suggest that discounters Aldi and Lidl will find their accelerated growth levels hard to match in 2015. Aldi’s growth of 21.2% is still impressive, but a relative slowing from its 36% peak in May 2014. Likewise, Lidl’s maximum growth of 24% in the same period is now down to 14.2%. Despite this slowdown, both retailers are still taking share from the other retailers – rising 0.8 percentage points and 0.4 percentage points respectively to 4.9% and 3.5%.”

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