Tesco and Sainsbury’s outperformance impresses Citi as grocery market slows

Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) continued to outperform the wider grocery market in April, according to Citi, even as sector sales growth slowed sharply.

The broker said Worldpanel by Numerator data released on Tuesday showed UK till roll sales rose 0.9% in the four weeks to April 19. That was down from 4.4% in the previous period and a 3.9% average over the prior 12 weeks.

Citi noted the comparison was tougher, with the latest period lapping favourable weather last year.

Tesco sales rose 2.5%, while Sainsbury’s increased 2.2%, keeping both ahead of the market after their recent full-year results.

Asda remained under pressure. Its sales fell 6.6% in the period, compared with a 0.9% decline over the previous 12-week average, though Citi said this also reflected a tougher comparative period.

Aldi and Lidl regained some relative momentum. Tesco and Sainsbury’s combined underperformed the discounters by 107 basis points, after outperforming them in the previous period.

Marks and Spencer Group PLC (LSE:MKS) food sales rose 2.7%, slowing from 10.3% in March.

The data also showed shoppers spending more on promoted items, with concerns that the Middle East conflict could push up prices of everyday goods.