Tesco Regains Some Share as Grocer Invests for Domestic Revival

Tesco Plc regained some market share in the U.K. over the past month as the country’s biggest grocer invests 1 billion pounds ($1.5 billion) to help win back shoppers, data from Kantar Worldpanel shows.

Tesco’s share was 29.9 percent in the 12 weeks ended April 14, the researcher said today, more than the 29.4 percent it held in the period ended March 17. The market share was still down from 30.7 percent in the same period a year earlier.

Tesco is smartening its supermarkets and hiring more staff to bolster a flagging domestic business that has lost share to discounters such as Aldi and upscale chains like Waitrose Ltd. U.K. same-store revenue rose 0.5 percent in the fourth quarter, excluding gasoline and value-added tax, the strongest growth in three years, the company said this month as it reported the first annual profit drop in almost 20 years.

J Sainsbury Plc was the only one of the four biggest U.K. grocers to win market share on an annual basis, the Kantar data showed, while Waitrose, Aldi and fellow discounter Lidl all had record market share. Spending at Sainsbury increased 5.4 percent in the 12-week period and market share rose to 16.9 percent from 16.6 percent a year earlier, Kantar said.

Food retailers are struggling to combat reduced spending as disposable incomes are curbed by an economic slump and inflation outstripping wage growth. At the same time, the mislabeling of horse meat as beef products that roiled the industry earlier in the year has made shoppers made more aware of food provenance.

Waitrose Gains

“Pressure on household budgets is undoubtedly driving some of the growth at the discounters, but messages about quality are starting to resonate” prompting “the strong performance of Waitrose,” Edward Garner, a director at Kantar Worldpanel, said in an e-mailed statement.

Waitrose’s 12-week sales climbed 12 percent, while its market share rose to 4.9 percent from 4.5 percent in the same period a year earlier. Aldi’s revenue jumped by 31 percent and market share advanced to 3.4 percent from 2.7 percent.

Market share at Wal-Mart Stores Inc.’s Asda chain weakened to 17.5 percent from 17.6 percent, while William Morrison Supermarkets Plc’s share fell to 11.5 percent from 11.9 percent.

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