Britain’s Tesco outperforms rivals over Christmas

Tesco (TSCO.L), Britain’s biggest supermarket group, outperformed its major rivals over Christmas, achieving its highest grocery market share since January 2018, industry data showed on Wednesday.

Its UK grocery market share rose 0.6 percentage points to 27.9%, a four-year high.

Rivals Sainsbury’s (SBRY.L), 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 Jan. 13. Its shares were up 0.9% at 0950 GMT, extending year-on-year gains to 24.7%.

Shares in Sainsbury’s, which updates on trading on Jan. 12, were up 1%.

Kantar said total UK grocery sales were 31.7 billion pounds ($42.9 billion) over the 12 week period, down 3% versus 2020 but up 8% on 2019.

He noted that premium own-label sales broke records this Christmas with shoppers spending 627 million pounds on supermarkets’ own upmarket lines over the four weeks to Dec. 26, an increase of 6.8% versus 2020.

Kantar said grocery price inflation reached 3.5% in December, its highest since spring 2020, adding nearly 15 pounds to shoppers’ average monthly grocery bills.

It said 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 consumer price inflation would peak at a 30-year high of around 6% in April.