Tesco sales fall again as Sainsbury's is declared an early Christmas winner

Tesco’s woes continued in the build-up to the all-important Christmas period as shoppers shunned the supermarket, while rival Sainsbury’s stormed ahead, according to the latest sales figures.

The two major supermarket monitors Kantar Worldpanel and Nielsen revealed Tesco suffered a drop in sales, by 3.4% and 3.1%, in the 12 weeks to December 5, stalling chief executive Dave Lewis’s turnaround.

But despite the fall, shares at the UK’s biggest supermarket rose 3%, taking the share price off 18-year lows, up 4.4p to 147.45p.

However, rivals Morrisons and Sainsbury’s also saw shares jump 4.6% to 146.6p and 4.3% to 247.1p, with analysts suggesting this could be due to short sellers closing some of their positions against the heavily shorted shares.

At Morrisons, sales fell 2%, according to Kantar and 2.1%, according to Nielsen.

Bosses hailed this a success, because it was the first set of results since it sold off its convenience stores estate, meaning the comparisons were likely to be tough, but also a sign chief executive David Potts is improving the business.

But the winner of the Big Four supermarkets was Sainsbury’s, which saw a rise of 1.2% at Kantar and 0.5% at Nielsen, as it gears up for Christmas and typically sees shoppers from other stores trade up to Sainsbury’s.

Lidl and Aldi continued their growth, up 17.9% and 15.4% at Kantar and 19.8% and 24.4% at Nielsen.

The supermarket price war heated up, with grocery inflation at minus 1.9%.

Prices fell faster than last month, due particularly to cuts in eggs, butter, bread, crisps and fresh poultry.