Sainsbury’s planned £7.3bn takeover of Asda comes as the London-based supermarket continues to be outgunned by its three major rivals, according to the latest sales figures.
Sainsbury’s sales rose by just 0.2% in the 12 weeks to 22 April, its slowest pace of growth for more than a year.
Asda’s sales rose by 1.4% in the period, but the Leeds-based chain and Sainsbury’s both lost market share, according to the latest data from Kantar Worldpanel, while Tesco and Morrisons held steady thanks to their turnaround plans.
“It is very competitive out there for Sainsbury’s,” said Fraser McKevitt, the head of retail and consumer insight at Kantar Worldpanel. “Having had a difficult couple of years, Morrisons is now doing the basics of retail very well and Tesco is not seeing hugely rapid growth but it is consistent. In the light of a zero-sum game for food retail that has put pressure on everybody else.”
Sales at Tesco rose by more than 2% for the first time since 2011, helping the UK’s biggest supermarket chain retain a 27.6% share of the market compared with 15.9% at Sainsbury’s and 15.5% at Asda.
Morrisons also achieved sales growth in excess of 2%, while discounters Aldi and Lidl increased sales by 7.7% and 9.1% respectively as they opened new stores. The overall market grew by 2%.
McKevitt said sales growth would now be harder to find for all supermarkets as grocery inflation is slowing. Prices rose by 2.1% in the 12-week period, the slowest pace since March last year, driven by increases in the cost of butter, bottled colas and bread, while the price of fresh poultry and laundry detergent fell.