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The UKs leading supermarkets experienced two consecutive months of growth for the first time in more than two years, according to Nielsen retail performance data released today.

During the four weeks ending 10 September 2016, Nielsen found value of sales were up 0.4% versus the same period a year ago whilst sales volumes increased 0.3%. Both metrics haven’t been positive for two consecutive months in over two years. The growth was partly driven by people making more shopping trips which benefited supermarkets with small store formats, in particular.

Similarly, the latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 11 September 2016 show that despite continued deflation of 1.1%, supermarket sales increased by 0.3% with particular growth in alcohol as shoppers celebrated Britain’s summer of sporting success.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, commented: “While overall sales growth has been slow, consumers have been keen to celebrate Britain’s Olympic and Paralympic golden summer, boosting alcohol sales by 8.5% in the past four weeks. Sparkling wines including Prosecco and Champagne led the way with growth of 36.0% as promotional events across a number of retailers successfully tapped into the nation’s celebratory mood.”

“With both value and volume growth most weeks since the middle of July we’re seeing the green shoots of recovery for the leading supermarkets in their battle against the discounters and price deflation,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “A sustained period of good weather and soaring temperatures into September also helped, as did an improved performance from Tesco, and continued good momentum at the likes of Co-op and Waitrose.”

Both sets of figures had Tesco as the best performer of the big four – with both finding its sales were down 0.2% during the 12-week period.

Asda was again the worst performer down 5.4% with both Nielsen and Asda.

Aldi and Lidl continue to grow – up from a 9.8% share last year with Kantar to 10.8 now – not only are both continuing to expand their store estates, but existing customers are visiting more frequently and upping their basket size

Co-op continues to outperform the market with sales growth of 3.1%, said Kantar, while Iceland’s recent run of success continues as sales grew by 6.3% compared with a year ago.

Morning update

Stevia producer PureCircle (PURE) has released its annual results this morning. Full-year sales increased $11.3m (9%) to $138.6m, driven by market adoption of stevia and a higher proportion of sales in recently launched innovation products.

However, sales growth was further adversely impacted by both the delayed timing of a number of customer launches and by an intervention from US Customs and Border Protection during the year.

Gross margin increased by $16.7m (+41%) to $57m, while operating profit increased $15.4m (+90%) to $32.4m.

CEO Magomet Malsagov said “Despite challenging market conditions in FY16, I am delighted with the progress PureCircle has made, with strong growth in both revenue and profit.

“The market for PureCircle Stevia has continued to develop strongly with favourable regulatory developments and continued roll-out of ever larger food and beverage brands using stevia.

“Significant milestones in the year include the approval of high purity stevia in India and Brazil, Reb M approval in Europe and the launch of our Zeta family of new ingredients, closing the taste gap for low or no calorie applications and opening up new F&B categories adoption of stevia. These developments underpin our confidence in the long term prospects for our business and support the investments we are making to increase production capacity and further product innovation.”

Tesco (TSCO) is the winner so far from this morning’s market data, up 1.3% on top of yesterday’s strong gains to 178.7p. Sainsbury’s (SBRY) is down 1.2% to 243.5p, while Morrisons (MRW) has edged down 0.5% to 213.9p

Overall the FTSE 100 is up 0.1% to 6,821.8pts.

Risers include Real Good Food (RGD), up 5.4% to 39p, Hilton Food Group (HFG), up 1.9% to 621.4p, Paypoint (PAY), up 1.8% to 1,015.5p.

The market is disappointed by PureCircle’s results despite the double-digit rises and sales and profits, sending it down 6.1% to 310p so far this morning.

Other fallers include Science in Sport (SIS), down 2.4% to 66.1p and Just Eat (JE), down 2.4% to 537p.

Yesterday in the City

Yesterday was a good day for the supermarkets as increasing optimism over Tesco’s (TSCO) half year results next month dragged the sector higher.

Tesco ended the day up 4.2% to 176.4p after broker Macquarie predicted it will report a 90% jump in trading profit driven by lower costs and a stabilisation of margins.

Tesco hitting a two-month high and optimism over this morning’s market share figures helped Sainsbury’s (SBRY) gain 2.6% to 246.5p and Morrisons climb 1.8% to 2,158.5p.

It was a good day for the FTSE 100 generally yesterday as it climbed 1.6% to 6,813.6pts.

Other strong risers in the bluechip index included Unilever (ULVR), up 1.9% to 3,583.5p, Diageo (DGE), up 1.8% to 2,158.5p, and Greencore (GNC), up 1.4% to 350.7p.

One notable faller yesterday was Dairy Crest (DCG), which slumped 6.3% to 626p after the cheese and spreads producer warned that profits will come under pressure this year as rising prices hit butter margins.

Other fallers included SSP Group, down 2.1% to 320.1p and Greggs (GRG), down 2.5% to 1,039p.

Finsbury Food Group (FIF) remained unchanged at 135.5p after posting its strong annual sales rise yesterday. The bakery group is up by 33.4% so far this year.

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