UK retail shares, led by Tesco, rose after figures over the key Christmas period showed consumer spending was more robust than expected.
The UK’s largest supermarket, which will publish its holiday trading update tomorrow, was crowned Christmas winner, broker Jefferies said.
The data also lifted Next and Marks & Spencer more than 4% at one stage and comes after positive updates from Aldi and other high street chains that brought back some appetite for consumer shares and bucked the high street woes.
Shares in Tesco rose as much as 4.3% as its performance was perceived as solid.
While the sales data for the critical Christmas period from Nielsen and rival Kantar Worldpanel showed that discount shops Aldi and Lidl gained market share, overall grocery sales in the 12 weeks to December 30 rose 1.6%.
Still, investors shunned Morrisons, whose shares were at their lowest since April last year after the UK’s fourth largest supermarket chain missed sales forecasts.
Market researcher Kantar Worldpanel said two-thirds of all British households shopped at either Aldi or Lidl over the 12 weeks to December 30, resulting in their highest-ever combined Christmas market share of 12.8%.
Traditionally, British consumers have traded-up to Britain’s big four supermarket chains — Tesco, Sainsbury’s, Asda, and Morrisons — as well as upmarket players M&S and Waitrose in the run-up to Christmas.
However, that pattern has changed in recent years as Aldi and Lidl have invested heavily in, and promoted, premium lines.
In Ireland, Lidl and Aldi account for over 22% of the market. Irish supermarket sales for the Christmas period are published next week.
Morrisons, Britain’s No. 4 supermarket chain, reported weaker-than-expected Christmas sales with growth slowing at both its retail and wholesale businesses.
Morrisons has reported three years of underlying sales growth, but its shares fell as much as 4.8%. The figure show Walmart-owned Asda as the top Christmas UK performer among the big four, followed by Tesco and Morrisons and with Sainsbury’s the laggard.
However, all four lost market share to the discounters.
Reuters. Additional reporting Irish Examiner