Is the Drastic Dave effect wearing off? Latest 12-week grocery share figures from Kantar WorldPanel showed sales at Tesco (LSE: TSCO) down 1.3% to 24 May, while its market share fell 0.4% to 28.6%.
This reversed Tesco’s bright start start to the year and took some of the shine off newly-minted boss Dave Lewis.
J Sainsbury (LSE: SBRY) also struggled, with sales down 0.3%, although its market share held steady at 16.5%.
Morrisons (LSE: MRW) was the surprise winner, with sales up 0.2%, which is respectable given current sector challenges. Market share remain unchanged at 10.9%.
Looking For Lewis and Clarke
So once again, Tesco is the worst performer of the FTSE 100-listed grocery stores (although Asda fared even worse, with sales down 2.4%).
This is food for thought for private investors who bought back into the stock, encouraged by the way Lewis set about ridding Tesco of the dead wood and dodgy practices he inherited from Philip Clarke.
Meet the new boss, rather different to the old boss.
Big Box Blues
I warned at the time that shutting stores, closing the HQ, junking private jets, culling 10,000 jobs, terminating final salary pensions and offloading BlinkBox, while effective, was the easy bit. Especially since Lewis could blame it all on his predecessor.
The tough part is getting customers to walk through Tesco’s doors again, especially since its larger outlets, which once looked like the future of shopping, have alienated customers in droves.
Latest figures aren’t encouraging on that front, with positive performance at Tesco Express convenience stores and the online channel undermined by falling sales at the big stores.
The Long Riders
Lewis won’t be turning to Morrisons for inspiration, despite its recent pick-up. That seems to be a case of the supermarket finally running into its hard-core loyal base. The stock is still hovering just over the FTSE 250 dropzone.
Sainsbury’s has been helped by its slightly upmarket image, and with its share price down 23% in the last 12 months it may tempt contrarians.
But new research puts a blight on all three’s prospects. Industry research body IGD has predicted that sales in traditional supermarkets will fall by another 2.9% over the next five years.
Total grocery sales will rise 13% over that time and there are no prizes for guessing who will reap the benefit: discounters Aldi and Lidl, but also upmarket Waitrose.
Forget it, though — all three are privately owned.