Tesco enjoys best sales trend in two years as booze and BBQs drive summer spending

Tesco: 0.2% decline is the smallest since March 2014
Tesco: 0.2% decline is the smallest since March 2014

Tesco saw its best sales in more than two years for the last three months, with the whole supermarket sector enjoying a boost thanks to the hot summer.

Both Kantar and Nielsen’s data for the last 12 weeks to 10/11 September showed Tesco’s sales down 0.2% – its best performance since March 2014, according to Kantar. 

Across all grocers, sales were up 0.3%. Supermarkets were boosted by high sales of alcohol, soft drinks and fresh food as consumers toasted Team GB’s Olympic success, and headed outside to make the most of the sun.

Over the last four weeks, soft drinks sales were up 8.3% year-on-year, while beers, wines and spirits were up 6.8%, Nielsen said.

Tesco’s "Drinks Festival" offer scheme helped it grow booze sales faster than any other category, said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel. "This period its Extra and larger stores delivered a positive contribution to performance," he added.

The better results from Tesco come in a context in which its big four rivals continue to struggle. Sales at Asda, the worst performer, were down 5.4% – a similar decline to the last few sets of data.

Morrisons reported rising like-for-like sales when it posted its half year results last week, but total sales in the 12-week period were down 2.3% (Kantar) or 2.7% (Nielsen). And sales at Sainsbury’s also fell, by 1.4%.

But the picture is brighter outside the big four, with Waitrose, the Co-op, M&S and Iceland all seeing good sales growth, while Aldi and Lidl continued theirs.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said that competition in the market would "remain intense, particularly with Tesco and, soon, Morrisons back in growth."

Watkins added that price remained a key battleground in the fight for customers; both Asda and Morrisons have recently announced fresh rounds of price cuts, leading to suggestions from analysts that this Christmas could prove to be the cheapest ever for consumers.

"There’s a lot of market share to play for in the £40bn sales opportunity up to the end of the year," said Watkins. "This is why the supermarkets need to maintain price cuts as part of a strategy to win back market share from the discounters who are expected to respond by increasing advertising spend again in the run up to Christmas."

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