Recovering Tesco puts pressure on rivals - Kantar

LONDON Tue Jan 29, 2013 2:16pm GMT

Customers shop at a Tesco store in Bishop's Stortford, southern England November 26, 2012. REUTERS/Suzanne Plunkett

Customers shop at a Tesco store in Bishop's Stortford, southern England November 26, 2012.

Credit: Reuters/Suzanne Plunkett

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LONDON (Reuters) - Tesco, Britain's biggest grocer, has maintained its market share and matched the market's growth for the first time since June 2011, according to industry data on Tuesday.

Market researcher Kantar Worldpanel said Tesco's sales increased 3.3 percent in the 12 weeks to January 20, giving it a market share of 30.4 percent and putting its rivals under pressure.

Tesco launched a 1 billion pound plan in April to revive UK sales by investing in more staff, revamped food ranges, refined marketing and smartened stores that give more space to food.

"These positive results are a sign of stabilisation for Tesco as the retailer gets back on track with its customers," said Kantar director Edward Garner.

"This improvement has put some pressure on the rest of the big four, with Morrisons in particular suffering."

Britain's No. 4 grocer Wm Morrison saw sales fall 1.7 percent and its market share decline by 0.6 percentage points.

No. 3 player J Sainsbury achieved sales growth of 3.2 percent, but its market share ticked down 0.1 percentage points to 16.9 percent.

Sales at No. 2 grocer Asda rose 2.1 percent, but its market share fell by 0.2 percentage points to 17.6 percent.

Tesco, Sainsbury and Morrisons all updated on Christmas trading this month. Tesco and Sainsbury's argued over who had won Christmas, while Morrisons was a clear laggard.

Kantar said that the discounters Aldi and Lidl strongly outperformed the market with sales growth rates of 28.2 percent and 10 percent respectively.

At the premium end, Waitrose continued to perform well, with sales growth of 8 percent echoing its record Christmas outcome.

Kantar highlighted that a widening gap between overall grocery market growth of 3.3 percent and grocery inflation of 4.9 percent is causing a squeeze on shopping budgets.

In the last week of the 12 week period (on January 15) the Food Safety Authority of Ireland found horse DNA in beef burger products sold by Tesco, Lidl, Aldi and Iceland.

Kantar made no comment on any impact this may have had on sales.

Tesco shares were up 0.2 percent at 11.54 a.m. British Time, Sainsbury's was up 0.6 percent and Morrisons was down 1.4 percent.

(Reporting by James Davey; Editing by Kate Holton and David Goodman)

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