Tesco records fastest sales growth in three years

The UK's largest supermarket Tesco last month recorded its first market share rise in five years. Also, according to new sales figures produced by market researcher Kantar Worldpanel, the company had just recorded its "fastest sales growth in three years".

Profits at the UK's largest supermarket group jumped 2.2 per cent for the 12 weeks to 6 November as against last year, increasing market share from 27.9 to 28.2 per cent.

"Tesco's continued sales acceleration and it winning market share is the key feature this month, despite it having a declining share of retail space," HSBC analyst David McCarthy told Reuters.

McCarthy had upgraded Tesco to a "buy" – and investors were doing just as the stock was up 4 per cent today to 214p.

According to Kantars' Fraser McKevitt, Tesco's improved performance reflected a new focus on own-brand lines, especially at the upper end of the price spectrum. The sales strategy had been successful at luring "affluent shoppers" to the brand.

According to commentators, the rapid rise of the discounters Aldi and Lidl had sparked an intense price war on branded goods and cut profit margins across the supermarket sector.

Meanwhile, sales at Waitrose were up 3 per cent, even as sales at Iceland increased 8.3 per cent.

Discounters Lidl and Aldi too, recorded increasing sales at 6.1 per cent and 10.2 per cent respectively. With the development, Lidl's share of the grocery market stood at 4.6  per cent, up from 4.4 per cent last year, while Aldi had a 6.1 per cent slice, up from 5.6 per cent last year.

However, at Asda, sales were down 5 per cent, while at Morrisons they slipped 2.4 per cent and at Sainsbury's sales were down 0.7 per cent.