Tesco up as UK sales rise at fastest pace in three years
Tesco's sales are rising at the fastest pace for three years, industry data showed yesterday - signalling the recovery at Britain's biggest supermarket group is gathering pace.
Shares in the company climbed as much as 4pc after market researcher Kantar Worldpanel said Tesco sales in its home market grew by 2.2pc year-on-year in the 12 weeks to November 6, boosting its share of Britain's grocery market to 28.2pc from 27.9pc this time last year.
The stock has risen 43pc so far this year, with the firm reporting three straight quarters of underlying sales growth in its main British market. Last month's Kantar report also showed Tesco growing its UK market share for the first time in five years. In October, Tesco set tougher profitability targets too.
"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," said HSBC analyst David McCarthy, who on Monday upgraded his stance on Tesco to "buy".
Kantar highlighted that most of Tesco's gains came from its own-label products, both its cheaper "Farm Brands", launched in March to encourage shoppers to return from discounters Aldi and Lidl, and its more upmarket "Finest" range. It also noted more affluent shoppers returning to Tesco.
Aldi and Lidl saw their UK sales growth fall to the slowest rate since 2011. Overall, UK grocery sales increased 0.8pc in the 12-week period.
Kantar also said deflation in Britain's supermarket sector weakened to 0.5pc in the 12 weeks to November 6 and predicted that after more than two years of deflation prices could start to rise in the coming months. (Reuters)