December 13, 2016 / 9:03 AM / 7 months ago

UPDATE 1-Tesco grows UK market share for third straight month - Kantar Worldpanel

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LONDON, Dec 13 (Reuters) - Tesco, Britain's biggest supermarket group, saw its recovery gain momentum with a third consecutive month of market share growth, industry data showed on Tuesday.

Researcher Kantar Worldpanel said Tesco's sales rose 1.6 percent year-on-year in the 12 weeks to Dec. 4, taking its UK market share to 28.3 percent from 28.0 percent this time last year.

Tesco, under boss Dave Lewis, has lowered prices, improved product availability and bolstered customer service. Now, two years after an accounting scandal plunged the firm into the worst crisis in its 97-year history, it is pulling away from rivals again. Its shares have increased 39 percent so far this year.

"Tesco's volume sales are growing faster than its value sales, particularly in the meat and fresh produce categories," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Conversely the other three major players in the sector - Sainsbury's, Asda and Morrisons - saw sales fall 0.6 percent, 4.7 percent and 1.4 percent respectively and all lost market share.

Morrisons' fall is, however, partly explained by store closures.

Discounters Aldi and Lidl saw growth of 10.0 percent and 5.7 percent respectively.

Deflation was 0.1 percent over the period, Kantar said.

"Despite widespread anticipation of higher prices shoppers are yet to feel the pinch of rising inflation," said McKevitt.

But he noted some categories are beginning to see price increases, with fresh fish up 5.3 percent year-on-year, chilled ready meals up 2.3 percent and beer up 2.1 percent. (Reporting by James Davey; editing by Sarah Young)

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