Tesco share price: Group’s UK grocery sales continue to rise

Supermarket performs strongly as Sainsbury-Asda merger looms

Tesco share price: Group’s UK grocery sales continue to rise

Tesco (LON:TSCO) continued to grow its UK grocery sales in the 12 weeks to April 22, the latest industry numbers by Kantar Worldpanel have shown. The update comes after the grocer’s blue-chip rival J Sainsbury (LON:SBRY) announced plans to merge with Asda, with the combined group set to overtake Tesco as Britain’s biggest grocer.

Tesco’s share price has been subdued in today’s session, having given up 0.51 percent to 234.70p as of 14:00 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.37 percent higher at 7,537.08 points. The group’s shares have added a little over 28 percent to their value over the past year, as compared with about a 4.7-gain in the Footsie.

Latest Kantar data

Kantar Worldpanel announced in a statement today that the British grocery market grew at its slowest rate since March 2017 at two percent in the 12 weeks to April 22, due to lower price increases. Tesco in particular performed strongly, growing sales by 2.1 percent and recording growth of more than two percent for the twelfth consecutive period, marking the first time the retailer has achieved this since March 2011.

Kantar meanwhile commented on the news of the Sainsbury-Asda merger, calling it “a pivotal moment for the British grocery market,” and forecasting that “it would transform the traditional landscape placing nearly a third of market share in the hands of the joint supermarket giant”.

Analysts on Tesco

The 14 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 262.50p, with a high estimate of 290.00p and a low estimate of 185.00p. As of April 27, the consensus forecast amongst 22 polled investment analysts covering the blue-chip supermarket has it that the company will outperform the market.

As of 14:13 BST, Tuesday, 01 May, Tesco PLC share price is 234.70p.

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