A Tesco supermarket. (Photo Credit: Martin Bodman/CC BY-SA 2.0)

Tesco's sales fall while Aldi and Lidl consolidate

UNITED KINGDOM
Wednesday, July 01, 2015, 03:40 (GMT + 9)

Britain's biggest supermarket chain Tesco reported a fall in sales amounting to 1.3 per cent in its first quarter, lower than expected, whereas Morrisons, Aldi and Lidl achieved growth in their sales.

According to the sector sources consulted by FIS.com, Tesco´s outcome is attributed to lower prices, better product availability and improved customer service.

The first-quarter decline in Tesco’s sales also marks an improvement on the 1.7 per cent fall recorded in the fourth quarter of its previous financial year, Reuters reported.

"Whilst the market is still challenging and volatility is likely to remain a feature of short-term performance, these first-quarter results represent another step in the right direction," Chief Executive Dave Lewis said in a statement.

"We do feel we are more in control than perhaps we were a year ago and this is another step in the right direction, but nobody ever said this was going to be quick or easy," Lewis told reporters.

Meanwhile, Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Morrisons has seen the largest sales increase among the ‘big four’ retailers for the second month in a row, recording a sales growth of 0.6 per cent, which has been supported by an increase in online shopping.”

“Continuing to grow ahead of the market, the retailer has increased its market share to 11.0 per cent, up 0.1 percentage points compared with a year ago. While only a small increase against a weak 2014, this does represent the first market share gains made by Morrisons since December 2011,” McKevitt added, The Star informed.

The retail sector statistics reveal that Aldi and Lidl increased their sales by 15.4 per cent and 9.1 per cent, respectively. Aldi reached a new high with a 5.5 per cent share of the market while Lidl, also showing continued growth, rose to 3.9 per cent. Waitrose also grew ahead of the market, with sales increasing by 1.2 per cent, moving to a 5.1 per cent share.

In the case of Sainsbury’s, market share fell to 16.5 per cent whereas for the Co-operative the retailer’s market share held steady at 6.2 per cent.

Market sources explained that all players are having to deal with commodity-driven deflation and a shift in customer habits away from big weekly shops at large out-of-town stores.

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