REUTERS/Suzanne Plunkett
Tesco CEO Dave Lewis is charged with the task of turning around the supermarket.
Tesco arguably had one of the toughest years in its existence in 2014 after Britain's largest supermarket said it overstated its profits by £250 million ($377 million) in September.
However, it looks like the new CEO, who joined on 1 September 2014, Dave Lewis's turnaround plan is starting to work wonders for the embattled grocer.
According to market researcher Kantar Worldpanel, Tesco recorded its best performance in 18 months in the 12 weeks leading to 1 March.
During that period, which included Christmas and New Year related discounts, sales were up 1.1%. Tesco even managed to control the recent falls in its marketshare. The data claims that Tesco has a 28.7% share of the market during this period. This meant that its marketshare only declined by 0.1% when compared to last year.
In comparison, sales in Britain's second largest supermarket, Asda, were down 2.1% across the same period. Its marketshare stands at 17%.
Here is a graphic from Kantar:
Kantar said that the 1.6% drop in food prices, from a year ago, created greater competition between supermarkets and helped consumers save £400 million. Kantar obtained this number by measuring the prices on more than 75,000 products across all the major retailers, over the course of a year, and then compared it to the prices from the year before. It claims it is the most authoritative figure currently available.
"All of the major supermarkets are cutting prices to win shoppers, especially within everyday staples such as eggs, vegetables and milk. Retailers are focusing their efforts on simple price cuts rather than complicated 'multibuy' deals," said Fraser McKevitt, head of retail at Kantar.
Tesco revealed in September last year that it had overstated its profits by £250 million. It asked accountancy giant Deloitte to internally investigate the company.
After Deloitte increased the overstated profit amount to £263 million, the company's chairman Sir Richard Broadbent stepped down. Then, in January, both Moody's and Standard & Poor's downgraded Tesco's credit rating. Lewis said he had no idea the company's finances were so damaged when he accepted the job in July last year.
Earlier this month Warren Buffett, who sold all his Tesco shares in 2014, compared investing in Tesco to an infestation of cockroaches.
Tesco is still under investigation by the Serious Fraud Office for the £263 million profit overstatement.
But the latest Kantar figures will throw weight behind newly appointed Lewis' turnaround plan. After taking over from Philip Clarke in the third quarter last year, he implemented a range of measures to help stop falling marketshare.
The plans included improving customer service and cutting the price of fresh produce and branded goods.