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Take that, Unilever! Tesco gains market share for first time in five years

Published: 13:23 18 Oct 2016 BST

Tesco extra hypermarket
There was a little bit extra in the sales at Tesco

Tesco PLC (LON:TSCO) has long been the dominant player in the supermarket sector, albeit steadily losing market share – until now.

The grocer increased its share of supermarket sales for the first time in five years in the latest quarter, according to market research firm Kantar Worldpanel.

In the 12 weeks to 9 October, Tesco’s sales rose 1.3% year-on-year, pushing its market share up to 28.2% from 28.1% a year earlier, making it the only one of the big four supermarket chains – Morrisons, Sainsbury’s and Asda being the others – to increase its market share.

“Foods including ready meals and produce have been among the fastest growing areas at Tesco, helped by its ‘farm brands’, but also its standard own label lines,” said Fraser McKevitt, the head of retail and consumer insight at Kantar Worldpanel.

 

On a day when consumer price inflation rose more than expected, to a 22-month high annual rate of 1.0%, McKevitt had some comforting words for those struggling to make ends meet.

“While the threat of rising prices is on a lot of minds at the moment, we’ve seen the 27th consecutive period of grocery price deflation, albeit at a slower rate. 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,” McKevitt said.

While Tesco’s fellow members of the big four all lost market share, second division players Iceland, Co-Op and Waitrose all gained market share.

Iceland increased sales by 6.9% with success across the store, not just in its core frozen lines which this period accounted for only 41% of sales, Kantar said.

The resurgent Co-op racked up its 17th consecutive quarter of growth, with sales up 3.1% year-on-year, taking its share up to 6.5%.

“Consumers are continuing to buy from Co-op stores more frequently with the average shopper now visiting almost twice a week – an 8% increase. The convenience retailer is responding to challenges from the wider market by focusing on its own label lines, with its re-launched membership card rewarding shoppers who choose Co-op’s own products,” McKevitt said.

 

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