After 13 reported months of decline Tesco has posted 0.3% growth and the supermarket industry as a whole appears to be improving with growth accelerating to 1.1%.
Top 5 Kantar monthly retail figures for Feb 2015
After 13 reported months of decline Tesco has posted 0.3% growth and the supermarket industry as a whole appears to be improving with growth accelerating to 1.1%.
The figures, reported by Fraser McKevitt, the head of retail and consumer insights at Kantar WorldPanel, cover the last 12 weeks ending on February 1, 2015.
The figures aren't signalling a full recovery by any means, but compared to more recent monthly figures it is positive news.
McKevitt said: "Supermarket industry growth has accelerated to 1.1%, hardly stellar, but an improvement from the 0.6% last period. And remember the market was contracting as recently as November."
However McKevitt is still sceptical about the long term stability of the sector. "With lower prices saving shoppers £182 million over 12 weeks perhaps the surprising thing is that there is market growth at all."
Challenges may still lie ahead for retailers as prices continue to decline after another record low in like-for-like sale prices.
"There are still strong deflationary pressures with like-for-like prices down 1.2%, another new record low. Retailers know they simply must be seen as competitive and all major supermarkets really are now cutting prices. Promotional levels remain near last month's record high with 41% of FMCG sales being on some kind of deal," said McKevitt.
McKevitt attributes the improvement to declining food prices increasing shoppers' basket size and cheaper oil prices increasing consumer spending. He said: "It looks like lower prices and perhaps spare cash from cheaper gas are helping shoppers to buy a few more groceries."
Tesco finally seems to have hit bottom and now is showing signs of growth, minimal, but still a turnaround and its best reported results since January 2014.
McKevitt said: "2014 was a rocky year for Tesco but today's figures show the supermarket giant growing for the first time since January last year. It is only growth of 0.3% but against the back drop of 13 reported declines it is great news for the country's biggest retailer."
Compared to the other big four supermarkets Tesco was the only retailer showing positive gains, emphasising that retailers are just fighting for market share amongst themselves.
"While Tesco marginally increased sales the rest of the big four declined, underlying the zero-sum nature of the game. There simply isn't room for all the big supermarkets to win," said McKevitt.
Morrisons also appears to be getting closer to stabilising as well, "Morrison's declined slowed to 0.4% their best showing since December 2013," said McKevitt.
Asda, which posted market share of 16.9%, reclaimed its number two spot as predicted from Sainsbury's, which posted its market share at 16.7%, following some of the peak festive trading data moving through the figures.
Waitrose, Aldi and Lidl continue to show growth in sales, however the figures indicate that market pressures are becoming more challenging for all three retailers.
McKevitt said: "Waitrose continued to demonstrate consumer appetites for something different growing sales 7.2% equalling their record share 5.2%. Even Waitrose aren't exempt from the price war though with pricing being cut and promotional levels approaching the big four."
Aldi and Lidl equally are seeing sales slowing from some of the previous record growth numbers that they have posted in the past and the days of such gains are most likely a thing of the past.
"Aldi, up 21%, and Lidl, up 14%, continue to grow but there is no denying this growth is on a downward trajectory. For instance, this is Aldi's slowest growth since June 2011. It's hardly the wheels coming off the discounters' bandwagon but we can anticipate more measured growth for 2015," he warned.