Tesco Corporation (USA)(NASDAQ:TESO) saw its recovery stall last month. This happens at the same time as discount retailer Aldi expands its market share in the British grocery market. The stalling of recovery poses a challenge to the Chief Executive Officer Dave Lewis’s effort to revive growth.
Tesco’s sales slowed to 0.3% the last quarter compared to 1.1. % a month ago according to researcher Kantar Worldpanel.Aldi has seen its market share climb steadily and is now the sixth largest supermarket in Britain.
According to Fraser McKevitt, the head of retail and consumer insight at Kantar Worldpanel, the Growth has been fuelled by over 500,000 customers choosing Aldi last year.
Tesco shares were down 0.6% at 249.4 pence in London. Under Lewis, Tesco has closed dozens of unprofitable stores and has lowered the prices on hundreds of branded goods to bring back the customers. The impact of Lewis’ decisions will be seen in the April 22 company report on earnings.
Tesco Corporation (USA)(NASDAQ:TESO)’s share of grocery market fell from 28.6% to 28.4% while Sainsbury’s share fell from 16.5% to 16.4%. Britain’s supermarket sector has been transformed by the emergence of Aldl and Lidl. Bo the supermarket chains give the consumers a lot in bargaining.
Aldl has left Waitrose behind to become the sixth largest supermarket in Britain. Its sales rose 16.8% to £1.34bn in the 12 week period.
In the same time, Aldi’s sales rose by 17% and that of German discount chain Lidl increased by 12%.
The largest supermarket in Britain, J. Sainsbury recorded a revenue growth of 0.2%, its first positive growth since August last year. Despite lowering of growth, Tesco still saw a higher growth than Morrison and Wal-Mart Asda.
According to Clive Black, an analyst at Shore Capital, Sainsbury’s performance is not that bad given the strong overlap between it and Tesco. He also added that Tesco was showing signs of stability.