Sainsbury's sales lag supermarket rivals as Morrisons leads again

Sainsbury's sales have begun to fall after several months underperforming its big supermarket rivals, industry data showed on Tuesday, while Morrisons has outperformed the Big Four thanks in part to sales of wonky vegetables.

Supermarket sales in 12 weeks to 17 June were up 2.1% on the same period a year ago, data from Kantar Worldpanel showed. The research also found grocery inflation eased to 1.9%, having stood at 2.1% in the previous two reports after slipping from 3.6% at the start of the year.

Morrisons sales grew 1.9% during the period, while Asda was not far behind with growth of 1.8% and Tesco's sales were up 1.4%.

Sainsbury's lagged well behind its rivals, with sales down 0.2% in the three-month period. Sainsbury's lost four percentage points of market share to 15.6%.

This was the biggest decrease in share for the Big Four, but all lost ground to the fast-expanding German discounters, Aldi and Lidl, which grew sales 8.2% and 10% respectively.

Of the other listed grocers, online specialist Ocado grew sales 10.1% to expand its market share to 1.2% from 1.1%.

With industry-wide sales having grown continually since June 2016, Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “After a couple of difficult years for the supermarkets this sustained period of growth is welcome news. The latest figures largely pre-date the soaring temperatures and new-found optimism for England’s World Cup chances but with the nation spending over half a billion more in supermarkets this period compared with last year, it suggests that summer has already arrived for many.":

Among the trends noted by Kantar, purchases of spirits were up 6%, with gin sales alone increasing £38m and soft drinks up 7%. While sales of hay fever remedies were up 19% year-on-year, reflecting Met Office predictions of record pollen levels.

With Morrisons again the fastest growing, McKevitt said: “Consumers have responded very well to Morrisons’ wonky fruit and vegetable lines – these have more than tripled in sales and now feature in 12% of baskets, helping the retailer’s cheapest tier of own label products grow by a remarkable 18%. The retailer was also helped by double digit growth in online sales, though its overall share fell by 0.1 percentage points to 10.6%."

Data from Nielsen also out on Tuesday showed grocery sales growth of 1.5% in the 12 weeks to 16 June.

A strong performance from convenience stores was noted by Nielsen, with sales increased 1.8% as more shoppers did ‘top-up’ shops locally for fresh foods and last-minute items. Sales at larger grocery multiples were up 0.6%, while volume was up 0.1%.

Nielsen found Sainsbury's share of total till receipts was down 0.4%, with Asda up 2.7%, Morrisons up 1.8% and Tesco gaining 1.5%. Marks & Spencer was up 1.5%.

In light of Tesco’s recent announcement that it will be moving away from its brand guarantee and re-investing in everyday low pricing, Mike Watkins, Nielsen’s UK head of retailer insight, noted that simpler pricing is a trend that will continue to benefit shoppers.

"Shoppers are benefiting from simpler pricing strategies, easier to understand promotions and overall everyday low prices. Tesco’s commitment to replace their Brand Guarantee in a few weeks’ time follows this trend we see across the industry and similar decisions taken by Sainsbury’s and Morrisons some time ago."