Asda gains grocery share

Sainsbury has lost its status as the UK’s No. 2 supermarket group by market share to its takeover target Asda for the first time in four years, industry data showed.

Sainsbury’s sales fell 1.8% over the 12 weeks to March 24, reducing its market share to 15.3% from 15.8% in the same period last year, researcher Kantar said.

That meant Asda, the British arm of US retailer Walmart, overtook Sainsbury with a market share of 15.4% as its sales edged up 0.1%, though Sainsbury remained the biggest seller of food and drink of the two.

Sainsbury argues that Kantar under-reads its general merchandise market share.

This is because since acquiring Argos in 2016, Sainsbury has streamlined general merchandise ranges in its stores in favour of Argos ranges.

However, Argos’ sales are not captured by Kantar. Sainsbury’s agreed £7.3bn (€8.5bn) takeover of Asda is being considered by Britain’s competition regulator.

The Competition and Markets Authority (CMA) said last month its initial 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. A final report is due by April 30.

Sainsbury shares, down 26% over the last six months, were little changed, giving it an equity value of £5.1bn.

Kantar’s data also showed Tesco’s sales rose 0.5% in the period and it remained the clear market leader with a share of 27.4%. Sales at No 4 player Morrisons fell 0.1%, giving it a market share of 10.3%.

However, all of Britain’s big four supermarkets lost market share to German-owned discounters Aldi and Lidl. Their sales increased, giving them a combined market share of 13.6%. The market researcher said grocery inflation was 1.5% over the 12 weeks.

Prices are rising fastest in markets such as cola, crisps, and chilled deserts, while falling in instant coffee, fresh sausages, and nuts.

Reuters