Tesco sales decline slows - Kantar Worldpanel

LONDON, April 5 (Reuters) - The sales decline at Tesco

has slowed for the fourth month in a row, industry data

showed on Tuesday, adding to evidence that Britain's biggest

supermarket group is gradually recovering.

Sales, profit and asset values at Tesco (Xetra: 852647 - news) have been hit by

shifts in shopping habits and the rise of German discounters

Aldi and Lidl.

Chief Executive Dave Lewis, who joined in September 2014, is

trying to revive Tesco with a focus on lower prices,

improvements to product availability and customer service, along

with better relationships with suppliers. Tesco shares have

increased by a quarter over the last year.

Tesco's sales fell just 0.2 percent in the 12 weeks to March

27, according to market researcher Kantar Worldpanel's monthly

report.

"A small increase in shopper numbers suggests Tesco could

return to growth in the next few months; welcome news after 12

months in decline," said Fraser McKevitt, head of retail and

consumer insight at Kantar Worldpanel.

Partly affected by previously announced store closures,

Tesco's market share fell by 0.3 percentage points to 28.1

percent.

Sainsbury (Amsterdam: SJ6.AS - news) 's, the second largest player, continued

to outperform its "big four" rivals with a sales increase of 1.2

percent.

Asda and Morrisons saw sales declines of 3.9

percent and 2.4 percent respectively, the latter reflecting

Morrisons' store closures accounting for 5 percent of its

trading space.

Lidl remained Britain's fastest growing supermarket with

sales up 17.7 percent. Sales at bigger rival Aldi rose 14.4

percent, giving it a record-high market share of 6.0 percent.

Kantar Worldpanel said overall UK grocery sales increased

1.1 percent year-on-year -- the fastest growth in 12 months

which partly reflected this year's early Easter holiday.

It (Other OTC: ITGL - news) said deflation was 1.5 percent, reflecting the impact of

the discounters and the market's competitive response, as well

as deflation in major categories such as butter, fresh sausages

and crisps.

Market share (percent) and change in sales

12 weeks to 12 wks to pct change

March 27, March 29, in sales

2016 2015

Tesco 28.1 28.4 -0.2

Sainsbury's 16.4 16.4 1.2

Asda 16.2 17.1 -3.9

Morrisons 10.5 10.9 -2.4

Co-operative 6.1 6.0 3.9

Aldi 6.0 5.3 14.4

Waitrose 5.1 5.1 1.7

Lidl 4.4 3.7 17.7

Iceland 2.0 2.1 -3.2

(Reporting by James Davey; Editing by Keith Weir)