Tesco biggest sales loser in last three months, says Nielsen

There was more bad news for Tesco on Friday after new figures showed it was the industry's biggest sales loser in the last three months.

Tesco's sales in the 12 weeks to 11 October dropped 5.2% against the same period a year ago, while Morrisons dipped 2.1% and Sainsbury was off 2%, according to data from retail researchers Nielsen.

It is likely to be seen as another setback for Tesco after the group announced on Thursday that a black hole in its accounts was bigger than expected, its chairman quit and it was unable to give any profit guidance.

Overall, the figures showed that sales at the UK’s "Big Four" supermarkets during the four weeks to 11 October were down 1.5% in value against the same period a year ago. Sales volume dropped 1.1%.

It is the eighth four-week period out of the last 10 to see a decline in year-on-year sales. The average shopper spend-per-visit at the big four supermarkets has now dropped 5% compared to a year ago, to £24.

The established supermarkets are losing share to discounters such as Aldi and Lidl, whose sales rose 20.8% and 16.1% respectively in the 12 weeks to 11 October.

Of the five largest supermarkets, the Co-operative and Wal-Mart's Asda were the only ones to see a year-on-year increase in sales over the last 12 weeks. Aside from Aldi and Lidl, Waitrose and Marks & Spencer outperformed the overall market the most. M&S 12-week sales lifted 2.9%.

Insolvency experts Begbies Traynor warned earlier this week that the big players need to iron out problems in supply chains and sharpen up other aspects of their businesses if they are not to face a difficult Christmas and maybe longer term financial problems.

Nielsen said advertising was boosting the discounters, with Lidl almost tripling spending to £4.9m in the month to 11 October while the established supermarkets reduced spending by 3.6% against a year ago to £28.4m.

Nielsen’s UK head of retailer and business insight, Mike Watkins, said: "With Christmas trading on the horizon, but little sales momentum across the Big Four and a risk of deflation by year end, it could be the catalyst for fewer but more targeted promotions.

"With falling spend-per-visit across many supermarkets, the battle to loosen consumers’ purse strings during the next eight weeks is set to be the toughest yet this year. So, alongside lower prices, inspiring advertising which differentiates brands in consumers’ eyes will be vital to make an impact."