Tesco Plc is showing signs of improvement following the lead of Dave Lewis as sales numbers increased for the first time since January 2014, according to industry data released on Tuesday.
Sales at Britains largest supermarket chain climbed 0.3% in the 12 weeks ended February 1 compared to the same period of 2014, said market researcher Kantar Worldpanel.
The Cheshunt, England-based grocer performed better than its big rivals, including Asda, Morrisons and Sainsburys. The researcher also said that Tesco benefited from increased customer traffic, with 236 000 new customers shopping at its stores during the period.
However, the companys market share fell 0.2 percentage point to 29%.
Despite the fall in market share, the data comes as good news for Tesco and Chief Executive Dave Lewis, who took over the struggling business in September. Immediately after Mr. Lewis took the lead position he managed to improve customer service and product availability by adding additional staff during the busiest hours.
Tesco also reduced the price tag on hundreds of branded products, outlining the companys attempt to attract more customers amid severe competition from German discounters Lidl and Aldi.
In line with Mr. Lewis efforts to return the grocer to growth, Tesco is shutting down more than 40 loss-making stores and reducing costs at it head office.
Tesco is also disposing of some of its non-core businesses, including Blinkbox Movies and Music. Last month telecom group TalkTalk acquired the unprofitable video service for an undisclosed amount, believed to be around £5 million, while Australias Guvera purchased Tescos music streaming service.
Additionally, Tesco has been reportedly looking for a possible buyer for the majority stake of its market researcher Dunnhumby, the business credited for establishing the companys club card.
In December Tesco rebuffed an offer for its Thailand unit Lotus from the countrys second-richest person Dhanin Chearavanont. However, the tycoon is rumored to be preparing to launch another offer.
Meanwhile, discounters Aldi and Lidl are still growing but at a much slower pace. Sales at Aldi, which almost doubled its market share since 2012, increased 21% during the reported period, compared to its best month in 2014 when the company managed to lift its sales by 36%. Lidls sales climbed 14% versus 24% growth in its strongest month last year.
Tesco gained 2.06% on Monday and closed at GBX 233.40 in London. On Tuesday the stock edged up 2.85% to GBX 240.05 at 11:37 GMT, marking a one-year decrease of 26.32%. The company is valued at £18.96 billion.
According to the Financial Times, the 17 analysts offering 12-month price targets for Tesco have a median target of GBX 220.00, with a high estimate of GBX 325.00 and a low estimate of GBX 155.00. The median estimate represents a 5.74 % decrease from the last closing price.
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