Has Tesco turned a corner? New supermarket sales data out today suggests it might have done. According to Kantar Worldpanel, the struggling supermarket’s sales have grown for the first time since last January.
Sales in the 12 weeks to February 1st were up 0.3% on last year. This means Tesco is the only one of the 'big four' supermarkets showing growth – Asda's sales dropped 1.7%, Sainsbury’s fell 1% and Morrisons' were down 0.4%.
It’s a rare piece of good news for the supermarket’s chief executive Dave Lewis, who is under pressure to turn things around after it emerged in September that its profits had been overstated by more than £250m. Investors were clearly pleased with today's figures as they sent the supermarket's share price soaring more than 2% to as high as 239.7p, its highest level since August.
‘Britain’s largest retailer is bouncing back from a tough year, with Dave Lewis’s efforts to overhaul the supermarket attracting an additional 236,000 shoppers into its stores in the last 12 weeks,’ said Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight.
It's not all happy news though. ‘Despite the increase in sales, Tesco’s overall market share fell to 29.0%, down by 0.2 percentage points compared to last year.' After everything that's happened to Tesco in the last year, such a tiny drop in market share is, if anything, something for Lewis to celebrate.
Though the big four still retain the lion’s share of the market, the German discounters are hot on their tails. Lidl sales were up 14.2% in the period, helping it nab a market share of 3.5%, while Aldi’s lightning 21.2% growth pushed it within a hair's breadth of the 5% mark. At the other end of the market, Waitrose is also performing well, with sales up 7.2%. Tesco's 0.3% is all well and good but it's clearly the extremes of the market where there's plenty of success to be had at the moment.
This data is only a snapshot of the market but it’s certainly a very interesting piece of news for Tesco, which has been beset by supplier scandals and fraud investigations. It's also currently in the process of closing 43 stores, so it's clearly not out of the woods yet. But perhaps the accounting revelations last year were just the kick up the arse it needed to realise it needs to adapt or die.