Belfast Telegraph

New shoppers help boost Tesco sales and expand market share

By Josie Clark

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."