Tesco and Morrison lose market share, Nielsen's dismal data shows

Two of the UK’s three listed grocers saw their market share drop in the latest 12 week period, according to reports citing the latest data available from Nielsen, as the grocery sector suffered a rare fall in both sales value and volume in the last four weeks.

In the four weeks to 10 October, prices dropped 1.0% versus the same period a year ago and volumes by 0.1%.

“Deflation, discounters and weak volume growths have meant a challenging four weeks for the supermarkets – despite the relatively warm weather and the Rugby World Cup,” said Nielsen’s UK head of retailer and business insight, Mike Watkins.

“Whilst lower food prices are good news for shoppers, they result in falling spend per visit across the industry which doesn’t benefit retailers who have the same level of fixed and operational costs.”

Sainsbury held its share of the total grocery market at 15.9% over the month as it was the only Big Four supermarket not to see a sales decline, according to the Nielsen data.

Tesco saw its market share was further cut back to 27.5% from 27.7% a month before and 28.2% a year ago, Nielsen said, while Morrisons also saw its share diminish by one percentage point over the month and 10.7%. WalMart-owned Asda also suffered a one-percentage-point monthly decline to 15.5% as its sales dropped 4.2%.

Marks & Spencer 3.0% was the highest growth in year-on-year sales as it and Waitrose both held onto the same market share as the month before, while Waitrose enjoyed the largest increase in new shoppers, of 2.1%.

These strong numbers were however largely eclipsed by the continuing rise of the discounters, which implies the industries price battle has little chance of diminishing any time soon.

Aldi further cemented its position as the fifth largest supermarket in the UK with strongest month for over a year, with a 6.6% market share up from 5.2% a year before and 6.4% a month ago, while fellow German-owned chain Lidl's 4.3% market share surging impressively to 4.4% from 3.6% a year before and 4.3% a month earlier.

Aldi's year-on-year sales grew 27.6% during the 12 weeks ending 10 October, with Lidl's up 23.3%.

Watkins added that other supermarkets will be particularly disappointed that discounter growth shows little sign of slowing, with Aldi’s year-on-year rise was their highest in nearly 18 months whilst Lidl’s was their highest in nearly a year.

Nielsen's numbers largely mirror similar data also released on Tuesday by Kantar Worldpanel, which found supermarket sales were up by 0.8% year-on-year in the 12 weeks to 11 October, with like-for-like grocery prices 1.7% lower.

Kantar found Sainsbury’s sales increased 1.1% to £3.96bn, thanks to a strong showing from online and local stores, but Tesco (-1.7%), Asda (-3%) and Morrisons (-1%) all registered a decline.

By 1100 BST, shares in Tesco were down 1.9% at 190p, Sainsbury's were 0.3% below par at 262.8p after jagging higher and lower, while Morrison's were up 0.35% to 173.5p.