Tesco records strongest growth in three years - Nielsen

Tesco has outperformed its three major supermarket rivals in the past quarter – and recorded its strongest sales growth in more than three years.

The retailer’s sales rose by more than 1% year on year, according to two sets of data published today – with analysts Nielsen and Kantar Worldpanel both reporting on the performance of the UK grocery market.

Nielsen said Tesco's sales rose 1.4% in the 12 weeks to 8 October versus the same period last year. The last time the retailer reported a higher increase was the 12 weeks ending 14 September 2013, when sales increased 2.3%.

Tesco was the only one of the big four retailers – which includes Sainsbury’s, Asda and Morrisons – to grow sales over the last quarter.


Nielsen grocery sales data


“Tesco has started to attract new shoppers again, with two-thirds of households visiting them in the last four weeks,” said  Nielsen UK head of retailer and business insight Mike Watkins.

He added that Tesco was well placed to benefit from the ‘little-and-often’ mode of shopping behaviour seen by Nielsen as a driver of future growth.

“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,” added Watkins.

Kantar Worldpanel recorded similar sales growth at Tesco, reporting that sales of foods, including ready meals and produce, had brought some of the fastest growth at the retailer, with overall sales up 1.3%.

This was the first growth from Tesco since March 2015, according to Kantar.


Kantar Worldpanel grocery sales data


“Sales growth has been strongest among family shoppers, while improved trading from its larger supermarket and Extra stores has supported this month’s gains,” said Kantar retail and consumer insight head Fraser McKevitt.

Nielsen described the quarter as “a good period” for the UK’s leading supermarkets, adding that the four weeks ending 8 October was the third consecutive month of growth in terms of value and volume sales, with both up 0.1%.

“Industry growth slowed mid-September as the heatwave ended, but picked up again as the warm and dry weather returned,” said Watkins.

Nielsen added that it expected retail prices to be kept in check for the time being, despite “currency-related cost price increases casting a shadow over next year”.

Kantar also pointed out that the threat of rising prices was on a lot of minds at the moment, adding that – although it had seen the 27th consecutive period of grocery price deflation – the rate of deflation had slowed.

“The price of everyday groceries fell by 0.8% compared with a year ago and in contrast to the -1.1% reported last month, with deflation particularly noticeable among pork, crisps and poultry products,” said Kantar’s McKevitt.

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