Sainsbury under pressure in UK supermarkets battle

Sainsbury’s sales fell in the latest 12-week period, industry data showed, as the group continued to underperform Britain’s other big four supermarket chains, including planned merger partner Asda.

Sainsbury under pressure in UK supermarkets battle

Sainsbury’s sales fell in the latest 12-week period, industry data showed, as the group continued to underperform Britain’s other big four supermarket chains, including planned merger partner Asda.

By joining forces, Sainsbury and Walmart-owned Asda aim to take on German-owned discounters Aldi and Lidl, whose UK sales rose 10% and 5.4%, respectively, in the 12 weeks through February 24, according to the data from market researcher Kantar Worldpanel. That increased Aldi and Lidl’s combined market share in the UK to 12.8%.

Sainsbury’s, Britain’s second-largest grocer, has underperformed its main rivals for more than a year, and its planned £7.3bn (€8.5bn) takeover of Asda suffered a major blow last month.

Britain’s competition regulator said its provisional view was that the deal should be blocked, in the absence of the sale of a large number of stores, or even one of the brands.

Kantar said sales at Sainsbury’s fell 1% in the 12 weeks to February 24, reducing its market share by 0.5 percentage points to 15.7%. That compares to gains of 1.3%, 1%, and 0.8% at leader Tesco, third-biggest player Asda, and number four Morrisons, respectively. Sainsbury shares were down as much as 1.3% yesterday.

Kantar Worldpanel said all of Britain’s big four supermarket chains lost market share in the 12-week period to Aldi and Lidl.

The researcher also noted that one in 10 UK shoppers claim to have started stockpiling food to prepare for a no-deal Brexit, with a further 26% reporting that they are considering doing so. However, Kantar said “this has not been borne out in sales just yet”.

“Overall grocery volumes rose by 1.2% in the four weeks to February 24, no increase compared with recent months, and it’s worth noting that hard-to-stockpile fresh and chilled foods made up 39% of the value of the average British shopping basket,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Kantar said average prices of grocery goods, which cover all items sold at UK supermarkets, rose 1.4%.

Reuters

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