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Grocery market accelerates as Tesco returns to sales growth

The UK grocery market grew at its fastest rate since June 2014 in the 12 weeks to 1 February with growth of 1.1%. The latest grocery… View Article

GENERAL MERCHANDISE NEWS

Grocery market accelerates as Tesco returns to sales growth

The UK grocery market grew at its fastest rate since June 2014 in the 12 weeks to 1 February with growth of 1.1%.

The latest grocery share figures from Kantar Worldpanel show that Tesco returned to growth for the first time since January 2014 with sales increasing by 0.3% year-on-year in the period. Despite the increase, Tesco’s overall market share fell to 29%, down by 0.2 percentage points compared to last year.

Meanwhile, Asda reclaimed the title of second largest retailer in the period with 16.9% of the market, thereby overtaking Sainsbury’s with its 16.7% share. Both supermarkets saw sales fall compared with a year ago – Asda by 1.7% and Sainsbury’s by 1%. Morrisons’ sales fell by 0.4% which was its best performance since December 2013. Its market share was 11.1% in the period.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Shoppers are taking advantage of both lower fuel prices and the continuing price war among the supermarkets to slightly increase their grocery spending. This has pushed the market into 1.1% growth, low by historical standards but a considerable improvement compared to November 2014, when the market contracted.

“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.”

Discounter Aldi saw sales growth of 21.2% compared to growth of 36% at its peak in April 2014. Meanwhile, Lidl increased its sales by 14.2% compared to its maximum growth of 24% in May last year. Despite the slowdown, the discounters increased their market shares to 4.9% and 3.5% respectively.

At the premium end of the market, Waitrose saw a sales rise of 7.2%, taking its overall share to 5.2%.

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