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New shoppers help boost Tesco sales and expand market share

By Josie Clark

Published 18/10/2016

Tesco expanded its share of the market to 28.2% - its first year-on-year market share gain since 2011
Tesco expanded its share of the market to 28.2% - its first year-on-year market share gain since 2011

Tesco has increased its market share for the first time in five years, figures show. The UK's biggest grocer increased sales by 1.3% over the last quarter, attracting a further 228,000 shoppers though its doors to expand its share of the market to 28.2% - its first year-on-year market share gain since 2011, Kantar Worldpanel said.

Its 1.3% sales growth, bolstered by family shoppers, is ahead of the overall market, where sales increased by 0.8% on last year.

Sainsbury's sales fell by 0.4% but its market share also grew by a percentage point to 16%.

Morrisons sales were down 3% due to the effect of the sale of its convenience stores late last year but its market share remained at 10.4%.

Asda's sales dropped 5.2% - the slowest rate of decline for four months for the Walmart subsidiary - despite a premium own-label sales increase of 8%, while its market share declined by one percentage point to 15.6%.

Meanwhile, shoppers enjoyed the 27th consecutive period of grocery price deflation, albeit easing to 0.8% on last year.

Kantar Worldpanel head of retail and consumer insight Fraser McKevitt said: "Foods including ready meals and produce have been among the fastest growing areas at Tesco, helped by its 'Farm Brands' but also its standard own-label lines.

"Tesco has attracted a further 228,000 shoppers through its doors to help the grocer grow to a 28.2% share of the market - its first year-on-year market share gain since 2011.

"While the threat of rising prices is on a lot of minds at the moment, we've seen the 27th consecutive period of grocery price deflation, albeit at a slower rate.

"The price of everyday groceries fell by 0.8% compared with a year ago and in contrast to the minus 1.1% reported last month, with deflation particularly noticeable among pork, crisps and poultry products."

Aldi's sales increased by 11.4% and at Lidl they grew by 8.4%, taking market share up to 6.2% and 4.6% respectively and maintaining the combined market share high of 10.8%. which the two discount retailers achieved last month.

Meanwhile, Nielsen figures show Tesco experienced its best year-on-year sales figures for more than three years with a 1.4% year-on-year increase in money taken at the tills.

Mike Watkins, Nielsen's UK head of retailer and business insight, said: "Tesco was the only one of the Big Four to see a year-on-year increase and has started to attract new shoppers again, with two-thirds of households visiting them in the last four weeks.

"They 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."

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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