Tesco gains grocery market share as Sainsbury's and Morrisons lose out

Tesco grew its market share in the last three months, according to grocery market data released on Tuesday that also showed its listed supermarket rivals Sainsbury's and Morrisons both saw sales fall.

Kantar Worldpanel also noted that while overall grocery prices are down on last year, some categories are beginning to show evidence of inflation that is expected to hit the economy in coming months, with fresh fish up 5.3% year-on-year, chilled ready meals up 2.3% and beer up 2.1%.

Amid that environment, Tesco’s volumes of sales grew faster than its value of sales in the 12 weeks ending 4 December, with its value of sales following last months's three-year record by increasing 1.6% year-on-year as it grew its share of the market to 28.3% from 28.2% a month ago.

Sales at Sainsbury’s fell by 0.6%, with market share down 0.2 percentage points to 16.5%.

Asda's also saw its market share fall by a similar margin to 15.3% as sales fell by 4.7%, though this was a marginally slower decline than in recent months.

Reflecting a smaller store estate, Morrisons’ overall sales declined by 1.4%, but the retailer grew its market share to 10.8% from 10.5% as it enjoyed a particularly strong performance online – recording its highest ever sales in that channel.

“Despite widespread anticipation of higher prices shoppers are yet to feel the pinch of rising inflation, with a typical basket of everyday groceries 0.1% cheaper than this time last year," said Fraser McKevitt, head of retail and consumer insight at Kantar.

He added: “Prices are still falling overall despite shoppers now spending less on promoted items than they did this time last year. Some 36.9% of spending was on offers during the past 12 weeks, down from nearly 40% in the 12 weeks to December 2015."

Aldi had the strongest sales growth in the period and its market share by 0.6 percentage points to 6.2%, while fellow discounter Lidl drove a 5.7% uplift but saw its market share remain the same.

Resurgent Iceland generated a 8.6% sales uplift and grew its share by 0.2 percentage points to 2.2%, while Co-op sales picked up 2.0% and Waitrose's by 1.1%.