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Tesco share price dips despite upbeat industry data

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Shares in Tesco (LON:TSCO) have lost ground in London this morning, even as the latest industry data showed that the company was the fastest growing of the UK’s big four supermarkets in the 12 weeks to December 31, 2017. The update, however, also revealed that Britain’s biggest grocer was still growing behind the market.

As of 09:34 GMT, Tesco’s share price had given up 1.77 percent to 210.50p, underperforming the benchmark FTSE 100 index, which has climbed marginally into positive territory and currently stands 0.29 percent higher at 7,719.09 points. The group’s shares have added nearly five percent to their value over the past year, as compared with more than a six-percent rise in the Footsie.

Latest Kantar data

Kantar Worldpanel said in a statement today that overall supermarket sales in the UK had increased 3.8 percent year-on-year in the 12 weeks to December 31, with shoppers spending £1 billion more on groceries during the reported period. At Tesco, sales rose 3.1 percent, making the company the fastest growing of the big four supermarkets.

The numbers also marked the company’s fastest sales growth since June, with performance helped by a 6.4-percent increase in sales of standard Tesco own label. Kantar further noted that with Christmas Day falling on a Monday in 2017, “Tesco Express, like other convenience stores, benefitted from restricted Sunday opening hours for larger supermarkets and were able to capitalise on consumers preferring to shop closer to home immediately before the big day”.

Despite the upbeat sales performance, Tesco’s growth remained behind the market, with a 0.2-percentage point dip in its market share to 28 percent.

Analysts on Tesco

Deutsche Bank reiterated its ‘buy’ rating on Tesco yesterday, valuing the shares at 240p. According to MarketBeat, Britain’s biggest grocer currently has a consensus ‘hold’ rating and an average price target of 195.06p.

Tesco is scheduled to update investors on its recent performance on Thursday.

As of 10:20 GMT, Tuesday, 09 January, Tesco PLC share price is 211.02p.

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