(Bloomberg) -- Ocado Group Plc grew faster than Britain’s major supermarkets as its UK grocery division showed signs of recovery.

Sales at the British online grocer rose 12.5% in the 12 weeks to April 14 from a year ago, ahead of the total online market growth of 6.8%, according to data published by research firm Kantar on Tuesday.

Ocado is vying to turn its fortunes around following a pretax loss of almost £400 million ($494 million) in 2023 and a more than halving of its stock price since the start of January. That’s putting shareholder pressure on the company to explore moving its London listing to New York, the Telegraph reported, without saying where it got the information.

The latest data highlights how the upmarket grocer’s efforts to compete against discounters through price cuts and special offers is driving some initial success. Discounter Lidl recorded the second best growth, gaining 9.1% in sales compared with last year as shoppers opted for more affordable items.

Lidl and Aldi, its rival German budget store, now account for 18% of the UK’s grocery market. Ocado still makes up less than 2% of the market, despite its sales growth.

Kantar said that special offers accounted for nearly 30% of supermarket sales, the highest level since 2021 except for Christmas periods.

Inflation fades

Kantar’s data also revealed another step in the UK’s recovery from an historic cost of living crisis. “This emphasis on offers, coupled with falling prices in some categories like toilet tissues, butter and milk, has helped to bring the rate of grocery inflation down” to 3.2%, said Fraser McKevitt, head of retail and consumer insight at Kantar’s Worldpanel. It means grocery inflation for the four weeks to April 14 dropped to the same level as the UK’s overall consumer prices index, which came in at 3.2% in March.

Tesco cemented its position as Britain’s biggest grocer with a market share of 27.4%, while Sainsbury’s followed at 15.3%.

Asda, however, is struggling to hold on to market share, losing 0.4% from a year ago. The UK’s third largest supermarket chain saw total sales rise 7.1% in 2023, according to a statement Monday, but the company risks losing ground as its seeks cash to ease its high levels of debt.

(Updates with more context.)

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