Tesco Returns to Growth for First Time in a Year

LONDON--Tesco PLC (TSCO.LN) returned to growth for the first time since January last year, but still continues to lose market share to German discounters Aldi and Lidl, as well as up-market retailer Waitrose, according to a survey Tuesday.

In the 12 weeks ended Feb. 1 Tesco increased sales 0.3% to 7.9 billion pounds ($ billion), but market share fell to 29%, from 29.2% for the comparable period in 2013, according to Kantar, which monitors the household grocery purchasing habits of 25,000 demographically representative households in the U.K.

But Aldi, Lidl and Waitrose saw their combined sales rise 43% to GBP3.71 billion, led by Aldi which increased sales an impressive 21.2%. Their combined market share has increased to 13.6%, from 12.1% in the 12 weeks ended Feb. 2, 2014.

"Britain's largest retailer is bouncing back from a tough year, with Dave Lewis's (chief executive) efforts to overhaul the supermarket attracting an additional 236,000 shoppers into its stores in the last 12 weeks," Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said.

"Early results suggest that discounters Aldi and Lidl will find their accelerated growth levels hard to match in 2015," Mr. McKevitt said. Aldi's growth has slowed from its 36% peak in April 2014 while Lidl's growth peaked at 24% in May last year.

In the 12 weeks ended Feb. 1, Asda, a subsidiary of Wal-Mart Stores Inc. (WMT), saw its market share slip to 16.9%, from 17.3% for the 12 weeks ended Feb. 2, 2014, according to Kantar. J. Sainsbury PLC (SBRY.LN) fell to 16.7%, from 17.1%, while Wm Morrisons Supermarkets PLC (MRW.LN) market share fell to 11.1%, from 11.3%.

-Write to Ian Walker at [e-mail]

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