Is Tesco turning the corner?

Tesco has managed to grow sales for the first time in a year. Figures from Kantar Worldpanel, which tracks the supermarket sector, show a 0.3% year-on-year rise in the 12 weeks to 1 February. Its main rivals' sales fell during the same period. Tesco also managed to entice an additional 236,000 people through its doors. Its overall share of the grocery market slipped by a further 0.2% to 29%, however. It is closing 40 stores, putting 2,000 jobs at risk.

What the commentators said

Fixing "dowdy stores and uncompetitive pricing" is a start, said James Moore in The Independent. But these issues were symptoms of two underlying problems: complacency and a sense of entitlement. Management often worried more about "the claret on board the corporate jet [than] the claret on the shelves".

And Tesco initially ignored Aldi and Lidl because it thought they were too small to worry about forgetting that when companies grow as fast as the two discounters, they don't stay small for long. It's not yet clear that Lewis has managed to root out this mentality.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

What's more, we don't know how many discount vouchers had to be sent out, or how deep the price cuts were to get sales up, added The Guardian's Nils Pratley. Overall grocery inflation of minus 1.2% "remains a strong headwind". And Aldi and Lidl remain a threat they have 8.4% of the market, up from 7.2%12 months ago. "They long ago passed the point where they could be dismissed as mere irritants to the big boys."