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British grocers' sales growth at five-year high on rising food prices
June 27, 2017 / 7:39 AM / 6 months ago

British grocers' sales growth at five-year high on rising food prices

LONDON (Reuters) - British supermarkets recorded their highest sales growth in five years in the latest quarter, driven by rising food prices, industry data showed on Tuesday.

FILE PHOTO: A woman walks past a Tesco supermarket in central London, December 9, 2014. REUTERS/Toby Melville/File Photo

Market researcher Kantar Worldpanel said UK supermarket industry sales rose 5.0 percent in the 12 weeks to June 18.

The main factor was grocery inflation which rose to 3.2 percent in the period, up from 2.9 percent in last month’s data, although a spate of hot weather and weak sales in the same period last year also influenced.

Market leader Tesco (TSCO.L) recorded its highest sales growth since 2012, with a rise of 3.5 percent, sending its shares up by as much as 2.4 percent.

“Tesco has attracted a further 369,000 shoppers and increased sales across all channels, rising fastest online and through its (larger) Extra stores,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

However, Tesco and its “big four” rivals Sainsbury’s (SBRY.L), Asda (WMT.N) and Morrisons (MRW.L), all continued to lose market share to discounters Aldi and Lidl, who recorded sales growth of 18.7 percent and 18.8 percent respectively.

Kantar Worldpanel said the current rate of inflation equated to an extra 133 pounds on the average UK household’s annual shopping bill.

It highlighted the price of butter, up 20 percent year-on-year, and a 14 percent rise in fresh and tinned fish.

Separately on Tuesday, a YouGov survey showed Britain’s messy election outcome and a weakening of the housing market caused a sharp loss of confidence among consumers.

Reporting by James Davey; Editing by Paul Sandle and Edmund Blair

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