Tesco shares struggle despite strong Christmas data
Tesco shares struggled — rising gradually after being down for most of the day — despite data showing that the supermarket giant probably outperformed it's smaller UK rivals during the festive season, writes and .
Tesco’s shares have risen by 12% over the past three months.
With UK consumers facing pressure from slow wage growth and the jump in inflation that followed the 2016 Brexit vote, company updates and data this month have shown they chose to prioritise spending on food and drink over the holiday season.
Shoppers cut back on almost everything other than food in the last three months of 2017, causing the biggest fall in non-grocery spending since 2009, figures from the British Retail Consortium (BRC) showed.
“The divergence between growth in sales of food and non-food has never been so stark,” BRC chief executive Helen Dickinson said.
Shares in Morrisons, the smallest of Britain’s four big supermarket groups, were up 2.3% after its trading update showed it attracted more customers with competitive prices, expanded premium ranges and an improved online range.
But Christmas trading survey data from both Kantar Worldpanel and Nielsen showed clear market leader Tesco enjoyed the strongest performance of the four chains over the Christmas quarter with total sales growth put at 3.1% and 3.4% respectively.
That data also showed second-placed Sainsbury’s and third-ranked Asda performed solidly, although growth at the German discounters Aldi UK and Lidl UK continued to outpace all of the big four, winning market share from all but Tesco.
Shares in Sainsbury’s were up by over 3%.
Morrisons said group like-for-like sales rose 2.8% in the 10 weeks to January 7, the bulk of its fourth quarter — well ahead of analysts’ average forecast of growth of 1.7% and third quarter growth of 2.5%.
Under chief executive David Potts, Morrisons is trying to develop a broader business by turning around the performance of its more than 500 UK stores while also pursuing growth in online and wholesale markets.
