Grocery market cheer for Tesco

Tesco bagsThere have been further signs that Tesco's turnaround plan is on track, with new figures showing Britain's biggest grocer is outpacing its three main rivals.

The supermarket giant notched up the best sales growth of the "big four" chains to hold its market share at 30.4% in the 12 weeks to January 20, while Asda, Sainsbury's and Morrisons all lost ground.

But Tesco failed to stave off the march of the discount brands with Aldi posting the strongest supermarket sales growth of 28.2%, increasing its market share from 2.5% a year earlier to 3.1%, while Lidl's market share was also up to 2.7% after it grew sales by 10%.

At the premium end of the spectrum Waitrose also took customers from competitors, increasing its market share from 4.4% to 4.6% after an 8% hike in sales.

Sales at Tesco grew 3.3% to £8 billion in the period, matching the rate of growth across the sector for the first time since June 2011, according to market researcher Kantar Worldpanel. Kantar director Edward Garner said: "These positive results are a sign of stabilisation for Tesco as the retailer gets back on track with customers."

Tesco revealed its best UK sales growth in three years over Christmas after chief executive Philip Clarke invested in a range of turnaround initiatives, including employing an extra 8,000 staff and launching its Everyday Value range.

But Mr Garner said Tesco's improvement had put some pressure on the rest of the big four, with Morrisons posting a 1.7% drop in sales, taking its market share from 12.5% to 11.9%.

The fourth biggest supermarket admitted it was feeling the heat from rivals in a "highly promotional" market, after posting below-par Christmas sales.

Kantar said that with grocery inflation growing faster than growth in the market there was a heightened need for retailers to "deliver value for money".

There were also signs of the revival of The Co-operative Group, which has struggled to compete with the main supermarkets. It reported a 0.9% rise in sales, after declines throughout 2012.

High Street casualties

High Street casualties

More stories