Tesco has continued its recovery with its lowest year-on-year sales decline for more than two years.

In the 12 weeks ending 27 February Tesco’s sales dropped just 0.5%, marking the third consecutive quarter of improvement, according to Nielsen.

The sales improvement came against backdrop of deflation for the market as a whole, with sales volumes declining 0.8% in the four weeks ending 27 February.

Asda had the largest drop (-5.0%) in year-on-year sales among the top 10 supermarkets during the 12-week period. Sainsbury’s, whose sales were flat, was the only big four supermarket not to see a drop in year-on-year sales.

Aldi had the highest sales increase (17.1%), followed by Lidl (15.7%).

Nielsen’s UK head of retailer and business insight, Mike Watkins, said: “Tesco’s turnaround continues. Building on the sometimes overlooked fact that three in four households shop there, Tesco has been improving the basics, including its pricing. This has encouraged more visits and attracted back shoppers who’d previously defected.

“Their new customer proposition highlights the benefits of having a large variety of store types – physical and online. Supermarkets offering more locations, good private label and a superior customer experience – not just lower prices – tend to be more successful, and these are some of the areas where Tesco are focusing.”