Apr 5, 2016
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Tesco sales decline slows

Apr 5, 2016

The sales decline at Tesco has slowed for the fourth month in a row, industry data showed on Tuesday, adding to evidence that Britain's biggest supermarket group is gradually recovering.

Sales, profit and asset values at Tesco have been hit by shifts in shopping habits and the rise of German discounters Aldi and Lidl.

Chief Executive Dave Lewis, who joined in September 2014, is trying to revive Tesco with a focus on lower prices, improvements to product availability and customer service, along with better relationships with suppliers. Tesco shares have increased by a quarter over the last year.

Tesco's sales fell just 0.2 percent in the 12 weeks to March 27, according to market researcher Kantar Worldpanel's monthly report.

"A small increase in shopper numbers suggests Tesco could return to growth in the next few months; welcome news after 12 months in decline," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Partly affected by previously announced store closures, Tesco's market share fell by 0.3 percentage points to 28.1 percent.

Sainsbury's, the second largest player, continued to outperform its "big four" rivals with a sales increase of 1.2 percent.

Asda and Morrisons saw sales declines of 3.9 percent and 2.4 percent respectively, the latter reflecting Morrisons' store closures accounting for 5 percent of its trading space.

Lidl remained Britain's fastest growing supermarket with sales up 17.7 percent. Sales at bigger rival Aldi rose 14.4 percent, giving it a record-high market share of 6.0 percent.

Kantar Worldpanel said overall UK grocery sales increased 1.1 percent year-on-year -- the fastest growth in 12 months which partly reflected this year's early Easter holiday.

It said deflation was 1.5 percent, reflecting the impact of the discounters and the market's competitive response, as well as deflation in major categories such as butter, fresh sausages and crisps.


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