Tesco beats rivals in Britain for Christmas sales

Some analysts believe it may raise its full-year earnings forecast again when it updates on trading on January 13. Photo: Nick Potts/PA

Tesco, the biggest supermarket group in Britain, outperformed its major rivals over Christmas, achieving its highest grocery market share since January 2018, new industry data showed.

Market researcher Kantar said Tesco's grocery sales in Britain over the 12 weeks to St Stephen's Day fell by almost 1% versus the same period in 2020, when several areas in Britain faced Covid-19 restrictions that boosted food sales. On a two-year basis, Tesco's sales were up by over 10%.

Its UK grocery market share rose to 27.9%, a four-year high.

Kantar said total British grocery sales were £31.7bn (€37bn) over the 12 weeks, down 3% compared with 2020 but up 8% on 2019. Irish supermarket figures are likely to show the same trends when Kantar release them next week.         

Rivals in Britain, Sainsbury's, Asda, and Morrisons saw their sales fall by 4.4%, 3.9% and 6.5% respectively over the 12-week period compared with 2020, though they were up 5.8%, 3.5% and 5.8% respectively on a two-year basis.

Tesco's increasing dominance reflects the unmatched scale of its store and online operations, the success of its "Clubcard Prices" loyalty scheme and its ability to withstand supply chain disruption. 

In October, Tesco raised its full-year earnings forecast. Some analysts believe it may raise that again when it updates on trading on January 13. 

Its shares rose almost 1% on Wednesday, extending year-on-year gains to 25%. That values Tesco at almost £22.75bn.

Shares in Sainsbury's, which updates on trading on January 12, were also up 1%.

"The data suggests that while there weren't formal (Covid-19) rules in place across the UK this year, many people celebrated at home again due to Omicron," said Fraser McKevitt, Kantar's head of retail and consumer insight.

He noted that premium own-label sales broke records this Christmas with shoppers spending £627m on supermarkets' own upmarket lines over the four weeks to December 26, an increase of 6.8% compared with 2020.

Kantar said grocery price inflation reached 3.5% in December, its highest since spring 2020, adding nearly £15 to shoppers' average monthly grocery bills. It said British prices were rising fastest in markets such as fresh beef, savoury snacks, and skincare, while falling in fresh bacon, bath and shower products and spirits.

Last month, the Bank of England revised up its inflation forecast to predict British consumer price inflation would peak at a 30-year high of around 6% in April. 

- Reuters. Additional reporting Irish Examiner