Asda and Aldi overtake supermarket rivals - Kantar

Asda moved up to become the second largest supermarket in Britain in recent weeks, while discounter Aldi overtook Morrisons in terms of shopper numbers as the sector saw its slowest rate of growth for a year.

Walmart-owned Asda's sales grew 0.1% in the 12 weeks to 24 March compared to the equivalent period last year and it grabbed a market share of 15.4%, according to data compiled by Kantar.

Kantar said Asda’s performance has been fuelled by attracting a greater number of affluent households and shoppers making more regular trips.

This saw it overtake Sainsbury's 15.3% market share as its total till roll shrank 1.8% year on year. Hoping to persuade competition authorities to allow their merger, Sainsbury's and Asda last month offered to sell up to 150 supermarkets, plus a number of convenience stores and petrol stations, to another grocery rival or a new entrant.

The only other major grocer to struggle in recent weeks was Morrisons, where sales fell 0.1% giving it a market share of 10.3%.

German-owned discounter Aldi welcomes 13m households to its stores in the past 12 weeks, which was more than at Morrisons. Aldi achieved a record market share of 8.0% but remained in fifth place in terms of spending, as while it had more households shopping at its stores, these were smaller and/or cheaper shops.

Fellow discounter Lidl was the second fastest growing supermarket, with sales growth accelerating to 5.8% thanks to strong growth was seen in bakery goods, frozen foods and biscuits. Lidl's market share grew 5.6% from 5.3% a year ago.

Among the 'big four' supermarkets, Tesco enjoyed the strongest growth, up 0.5% but still saw its market share shrink to 27.4% from 27.6% a year ago due to the rise of the discounters.

Fraser McKevitt, consumer head of retail and consumer insight at Kantar, pointed out that the number of sales Tesco completed through a deal increased to 40.1%, which was notable at a time when the level of promotion across the grocery market has fallen to less than 31%, the lowest in a decade.

Ocado’s market share reached a new high of 1.3% after growth of 5.5% in the period.

Said McKevitt: “As both Ocado and Co-op have announced new West London-based rapid delivery systems in the past month, it’s clear they are eyeing up the £46bn market of less than £30 top-up shops – of which only a fraction are currently home delivered. However, it remains to be seen if this can be successfully rolled out beyond these initial small areas.”

GROCERY MARKET GROWTH

The overall grocery market saw sales growth of 1.4% during the 12-week period, according to Kantar, down from the 1.9% growth reported a month ago and the slowest rate of growth for a year, not helped by the later Easter compared to last year.

Rival data was also published by Nielsen on Tuesday, showing consumer spending slowing in the grocery sector for the third consecutive month, with households continuing to spend less at the ‘big four’ and giving a combined 16% share to Aldi and Lidl.

The total till roll was up 1.2% in the last four weeks, Nielsen said, below the CPI rate of 1.9% and compared to grocery sales 2.5% growth this time last month. In the last 12 weeks, the combined market share of the top four supermarkets was 64.1%, compared with 65.6% last year.

Nielsen said the slowdown in household spending was attributable to the increased costs of living from rises in energy and fuel prices and council tax, as well as uncertainty over Brexit negotiations.

“The first quarter of 2019 has shown a continued slowdown in consumer spending on grocery, with the average household spend each week on groceries amounting to £71, back to the level last seen in October 2017," said Mike Watkins, Nielsen’s UK head of retailer insight, excluding March last year when sales were stronger due to the ‘Beast from the East’ which caused people to stock up, and an early Easter.

"This means that grocery spend remains broadly unchanged in the last 18 months despite inflation. We can see a change in shopping behaviour as well as a shift in sentiment as households shop around to make savings.”

Watkins predicted brighter times ahead for the sector, with Easter on the horizon and potential warm spring weather and more clarity over the status of Brexit, which he said "will help to kick-start growth for the big supermarkets and boost sales in time for summer".

Nielsen's data showed Aldi in fourth place for market share at 9.7% for the 12 weeks to 23 March, with Morrisons at 9.6%, while it had Sainsbury's still in fourth place at 14.4% versus Asda at 13.6%.

Marks & Spencer's growth was down 0.3%, Nielsen calculated.