Britain’s biggest supermarket Tesco (TSCO.L) saw sales grow at their fastest rate in three years in its most recent trading period, industry data showed on Tuesday, consolidating its return to market share growth and sending its shares higher.
Market researcher Kantar Worldpanel said Tesco’s sales grew by 2.2 percent year-on-year in the 12 weeks to Nov. 6, boosting its share of Britain’s grocery market to 28.2 percent from 27.9 percent this time last year.
Kantar said most of Tesco’s gains came from its own-label products, such as its “Farm Brands” and “Finest” ranges and noted more affluent shoppers were returning to its stores.
Last month’s Kantar report showed Tesco growing its market share for the first time in five years.
Conversely the discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] are now growing at their slowest rate since 2011, at up 10.2 percent and up 6.1 percent respectively, Kantar said.
Britain’s three other major supermarkets – Sainsbury’s (SBRY.L), Asda (WMT.N) and Morrisons (MRW.L) – saw sales declines of 0.7 percent, 5.0 percent and 2.4 percent respectively, though Morrisons’ fall reflects the closure of some stores.
Kantar Worldpanel also said deflation in Britain’s supermarket sector contracted to 0.5 percent in the 12 weeks to Nov. 6 and predicted that after more than two years of deflation prices could start to rise in the coming months.
“We’re likely to see prices starting to creep up again in December, unless retailers choose Christmas to unleash a new round of price cuts,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
“Although it’s tempting to link any potential price increases to Brexit and the devaluation of sterling, it’s worth remembering that deflation has been easing since December last year, well before the (June) referendum.”
Overall grocery sales increased 0.8 percent in the 12-week period, Kantar said.