Sainsbury's, Lidl and Aldi gain while rivals struggle

The pace of discounting in the grocery market has stepped up ahead of Christmas, leading to falling sales for three of the UK’s “big four” major supermarkets.

Latest figures from Kantar Worldpanel for the three months to 6 December show sales declined at Tesco, Asda and Morrisons as they gear up for their biggest trading period of the year.

Asda’s market share hit a nine year low at 16.2%, as its sales slid by 3.4%, losing further ground to Sainsbury’s, which has claimed number two position in the UK supermarket league.

Sainsbury’s increased sales by 1.2%, with Kantar citing seen strong trade in its champagne, sparkling wine and its premium own-label “Taste the Difference” ranges. The supermarket may also have been helped by a positive experience over Black Friday, the late November discount day, when Sainsbury’s said it sold two and a half times the amount of goods it offloaded last year.

But the chain’s performance was far outshone by fast-growing discounters Aldi and Lidl, where sales rose by 15.4% and 17.9% respectively, enabling them to hold on to a combined market share of 10%, achieved for the first time last month.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Although slow growth means a distinct lack of seasonal cheer for the market, the news is more positive for consumers looking to save this Christmas. Last year customers spent an average of £71.33 on their big Christmas shop but with falling prices set to continue, shoppers are likely to enjoy a cheaper Christmas this year. All supermarkets are cutting prices, particularly on staples like eggs and butter.”

He said the cost of everyday groceries fell by 1.9% this month compared with 1.7% last month.

Meanwhile shoppers are stocking up for Christmas late this year, according to analysts at Nielsen. Mike Watkins, UK head of retailer and business insight, said 1% less was spent at grocery tills in the four weeks to 5 December on the same period last year, while the volume of items bought slid 0.8%.

Watkins said: “It’s been a very difficult year for the major supermarkets, driven by price deflation and compounded by having to respond to the discounters’ lower prices – even promotional activity around Black Friday did nothing to boost food sales.”

Asda ducked out of Black Friday while Tesco gave the event the biggest promotional push of the major traditional chains, but both endured a 3.4% decline in sales in the three months to 6 December, according to Kantar. Nielsen’s data indicates a 4.3% decline at Asda, making it the worst performer of the big four, while if records a 3.1% decline for Tesco.

Morrisons sales figure is partly affected by its sale of 130 convenience stores, while Asda and Tesco are struggling to draw shoppers to their large out of town stores.

But there was good news for The Co-op and Waitrose, which achieved sales growth of 2% and 2.7% respectively, according to Kantar, enabling them to increase their share of the grocery market to 6.2% and 5.1%.

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