Growth at Aldi and Lidl has slowed to the lowest level since the end of 2011 as Tesco and Morrisons have started to make steady recoveries, according to Nielsen retail performance data.

During the 12 weeks ending 5 November 2016, Aldi’s year-on-year sales revenue increased 11.3% – whilst Lidl’s increased 5.2%. The combined figure across the two discounters is the lowest for five years. However, Nielsen said the current growth still far outstripped the 1.4% rate across the overall UK grocery market.

“It’s inevitable that a time would come when the discounters experienced a slowing growth rate, and three factors have combined to see this happen,” added Mike Watkins, Nielsen’s UK head of retailer and business insight. “Firstly, the growth rates a year ago were particularly high due to a period of new store openings, so it’s always harder to maintain growth against that. Secondly, the supermarkets have had more time to alter strategies to fend off the discounters, particularly Tesco whose recovery continues apace – its 2.3% growth was the strongest in over three years.

“Finally, shoppers are still spending freely and we’ve seen a return of sustainable growth in the volume of items people are buying, helped by industry-wide price cuts, so one of the discounters’ USPs is less pronounced in shoppers’ minds.”

Revenues were up 1.1% at the supermarkets in the four weeks to 5 November year on year, which is the highest figure, excluding Easter-inflated periods, since the end of 2013 the fourth consecutive month of growth in money taken at the till and volume of goods sold.

Meanwhile, the latest figures from Kantar Worldpanel for the 12 weeks to 6 November 2016 revealed that Tesco has grown at its fastest rate in three years, with sales increasing by 2.2%. Iceland also recorded strong growth with sales up 8.3% as it looks to move its product range upmarket. Overall supermarket sales increased 0.8% year-on-year, the second consecutive month of growth.

Sales at Sainsbury’s declined by 0.7%, contributing to a 0.3 percentage point fall in market share to 16.3%. Asda’s rate of decline slowed slightly to 5.0%, though increased sales in its premium own-label lines were a bright spot this period. Morrisons too saw a boost in premium own-label thanks to its ‘The Best’ line, though total sales fell by 2.4% in line with the context of a smaller store estate.

Grocery deflation now stands at 0.5%, though prices could start to rise in the coming months, Kantar said.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel,added: “Tesco’s 2.2% growth is a considerable improvement on the numbers it was delivering this time last year, and indeed in 2014. Branded sales did see an increase but most of the gains were made through its own-label products, both at the cheaper and more premium ends of the price spectrum.

“Tesco’s Farm Brands continue to benefit from sales growth in fruit and vegetables, while the premium Tesco Finest range has grown by 6% in the past 12 weeks, notably in crisps, fresh meat and chilled convenience. Much of Tesco’s growth has come from more affluent shoppers returning to the store, and average spend per trip is up by 2.1% to £20.69.”

Tesco has made strong gains this morning, with shares up 3.4% to 212.7p. Sainsbury’s was up 1.8% to 240.8p and Morrisons benefitted from investors buying into the sector, with shares up 3% to 218.9p. Ocado climbed 2.6% to 279.5p on sector confidence.

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