Tesco share price under pressure after industry data

on May 4, 2016
Updated: Oct 21, 2019

Shares in Tesco (LON:TSCO) have fallen more than three percent in London in today’s session, underperforming the broader market, with the latest Kantar data showing that more customers are leaving the UK’s biggest supermarket. The news comes after the FTSE 100 group recently warned alongside its full-year results that market conditions remained challenging.

As of 13:34 BST, Tesco’s share price had lost 3.81 percent to 162.80p, underperforming the broader London market, with the benchmark FTSE 100 index having shed 1.15 percent to stand at 6,114.53 points. The grocer’s shares have lost more than a quarter of their value over the past year, but are up nearly 10 percent in the year-to-date.
Kantar’s latest grocery data showed that all the major supermarkets saw a decline in their rate of growth in the 12 weeks ending April 24. Sales at Tesco fell 1.3 percent during the reported period, as compared with a 0.2-percent fall in the 12 weeks to the end of March.

“This marks the first time that each of the big four has simultaneously witnessed a drop in sales since April 2015,” Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said in a statement. Sales at blue-chip peers J Sainsbury (LON:SBRY) and Wm Morrison Supermarkets (LON:MTW) slipped by 0.4 percent and 2.6 percent, respectively, while German discounters Aldi and Lidl maintained their record share high of 10.4 percent which they first reached last month.
Kantar’s update comes after Tesco’s chief executive Dave Lewis warned last month that the grocer was trying to improve its competitiveness “in what remains a challenging, deflationary and uncertain market”.
Analysts at Deutsche Bank, who see Tesco as a ‘hold,’ trimmed their price target on the stock from 210p to 195p today. JPMorgan Chase & Co meanwhile remains ‘underweight’ on the UK’s biggest grocer, valuing the shares at 150p.
As of 13:58 BST, Wednesday, 04 May, Tesco PLC share price is 162.85p.