Photographer: Chris Ratcliffe/Bloomberg

Tesco Sales Drop Eases as U.K. Grocery Leader Begins Turnaround

  • Shares gain as Kantar data suggests customers may be returning
  • Discounter sales growth accelerates, with Lidl leading the way

Tesco Plc’s sales decline eased further in the early weeks of 2016, adding to signs of a turnaround at the U.K.’s leading grocer.

Revenue fell 1.6 percent in the 12 weeks ended Jan. 31, the smallest drop since September, according to a report from researcher Kantar Worldpanel. Wal-Mart’s Asda saw its sales decline worsen, while growth slowed at J Sainsbury Plc as discounters Aldi and Lidl further strengthened their positions.

Tesco’s performance suggests that the company has consolidated its better-than-expected sales over Christmas, when customers began returning to the U.K.’s largest supermarket chain. The shares rose 2.3 percent to 176.7 pence at 9:03 a.m. in London.

The growing popularity of Aldi and Lidl remains a thorn in the side of the U.K.’s largest grocers. Lidl’s sales rose 19 percent in the 12-week period and Aldi’s gained 14 percent.

“We can expect both retailers to continue to take market share this year as they fulfil their plans for more outlets," Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight, said by e-mail.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE