Belfast Telegraph

On-the-up Tesco outperforming rivals in grocery war

By Graeme Evans

A resurgent Tesco has outperformed its 'big four' rivals in the latest phase of a price war that has seen record low grocery deflation, research has shown.

The UK's biggest grocer posted its strongest performance in 18 months with sales up 1.1% in the 12 weeks to March 1 compared with a difficult 2014, the latest figures from Kantar Worldpanel reveal.

By comparison, nearest rival Asda's sales were down 2.1% and Sainsbury's and Morrisons posted declines of 0.5% and 0.4% respectively.

Kantar added that deflation reached a new low of minus 1.6% in the period as price competition between the supermarkets continues to impact the market, saving shoppers £400m in the past 12 weeks.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "All of the major supermarkets are cutting prices to win shoppers, especially within everyday staples such as eggs, vegetables and milk.

"Retailers are focusing their efforts on simple price cuts rather than complicated 'multi-buy' deals."

Fellow German chain Lidl saw growth of 13.6% and a market share of 3.5%.

Increasing sales have helped Tesco arrest its falling market share, which is down 0.1 percentage points compared with last year at 28.7%.

Asda's share has fallen to 17% from 17.5% a year earlier, while Sainsbury's is down to 16.8% and Morrisons stands at 11%.

Bradford-based Morrisons is expected to post a sharp drop in annual profits tomorrow but it may also show signs it is starting to get to grips with falling sales days before its new chief executive arrives.

David Potts, who has more than 40 years' retailing experience at Tesco, takes up his post on Monday.

Tesco's fortunes have improved since the arrival of new boss Dave Lewis, with his strategy including price cuts across hundreds of lines as well as the closure of 43 loss-making stores - including three in Northern Ireland.

Tesco is culling two outlets in east Belfast - including at Connswater shopping centres - and another in Ballymena as part of cost-cutting measures.

The closure of the Connswater store - has prompted concerns over the centre's future, after its second anchor tenant Dunnes Stores also shut its doors.

It's understood tenants were told last month that several retailers had an interest in setting up shop.

But a spokesman for Asda said it "does not currently have any plans for a new store in this location".

Belfast Telegraph