LONDON Tesco (TSCO.L), Britain's biggest supermarket chain, has achieved its best 12-week sales performance for over two years, industry data showed on Tuesday, adding to evidence that the firm's recovery from several years of trouble is now well established.
Market researcher Kantar Worldpanel said Tesco's total sales fell 0.2 percent year-on-year in the 12 weeks to Sept. 11 - its best reading since March 2014, .
Tesco, which has also reported two straight quarters of underlying UK sales growth, will publish first-half results and second-quarter sales on Oct. 5.
Hammered by changing shopping habits, the rise of German discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] and an accounting scandal in 2014, Tesco has fought back under Chief Executive Dave Lewis, who took charge in Sept. 2014, with a strategy based on lower prices, streamlined product ranges, better customer service and simplified relationships with suppliers.
Its shares, which have increased 20 percent so far this year, were up 1.1 percent at 178.4 pence at 1122 GMT.
Kantar said Tesco was the best performer of Britain's big four supermarkets over the 12-week period, followed by Sainsbury's with a 1.4 percent fall in sales and persistent laggard Asda (WMT.N) with a 5.4 percent decline.
Morrisons' total sales fell 2.3 percent - a reading which reflects the 5 percent reduction in its selling space over the last year.
The growth of Aldi and Lidl continued, with the pair recording sales rises of 11.6 percent and 9.5 percent respectively, and still gaining market share.
"Not only are both continuing to expand their store estates but existing customers are visiting more frequently and upping their basket size," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
Overall UK grocery sales rose 0.3 percent, boosted by a 8.5 percent rise in alcohol sales in the last four weeks of the period.
Kantar said price deflation was 1.1 percent for the 12 weeks. Falling prices reflect the impact of Aldi and Lidl and the market's competitive response, as well as deflation in major categories such as detergents, bacon and crisps.
(Reporting James Davey and Sarah Young; editing by Kate Holton, Greg Mahlich)