Tesco enjoys fastest growth in three years as Aldi and Lidl slow


The UK’s biggest supermarket, which has been gradually returning to health since boss Dave Lewis took the reins in September 2014, grew sales by 2.2 per cent in the 12 weeks to November 6, according to Kantar Worldpanel’s closely watched snapshot of the grocery sector. The company’s market share rose to 28.2 per cent, from 27.9 per cent in the same period a year ago, reports The Telegraph.

Tesco’s own-label lines, including its Finest range, helped lure shoppers in, Kantar analyst Fraser McKevitt said. “Much of Tesco’s growth has come from more affluent shoppers returning to the store, and average spend per trip is up by 2.1 per cent to £20.69,” he added.

The large supermarkets have been hurt in recent years by the rampant growth of the German discounters Aldi and Lidl, which have been opening new stores at a furious pace. However Kantar’s data indicated that these chains were now growing at their slowest pace since 2011. Aldi’s sales rose 10.2 per cent to a 6.1 per cent market share, while Lidl was up by 6.1 per cent to a 4.6 per cent share.

Of the remaining “big four” supermarkets, Sainsbury’s recorded a 0.7 per cent sales fall, while Morrisons and Asda continued to struggle, down 2.4 per cent and 5 per cent respectively.

The grocery market as a whole chalked up 0.8pc growth in the 12 weeks. The sector has been hit by deflation, with prices falling consistently for more than two years as the major stores compete with each other to lure in shoppers. Grocery prices fell 0.5 per cent during the period, although this was a “significant reduction” on deflation in the summer, Mr McKevitt said. Analysts are predicting that inflation will start to return.

“We’re likely to see prices starting to creep up again in December, unless retailers choose Christmas to unleash a new round of price cuts,” Mr McKevitt added. “Although it’s tempting to link any potential price increases to Brexit and the devaluation of sterling, it’s worth remembering that deflation has been easing since December last year, well before the referendum.”