Sainsbury’s slips behind supermarket rivals after Asda merger blocked

Sainsbury's sales fell behind those of rivals in the three months to the end of April, according to data released just a week after the supermarket's £7.3bn Asda merger was blocked.

Sainsbury’s suffered a 1.2 per cent fall in sales compared to the same period last year, data group Kantar's statistics showed, while Aldi and Lidl both enjoyed strong growth.

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The supermarket, whose planned takeover of Asda was scuppered by the competition regulator last week, also saw its market share slip by 0.5 percentage points to 15.4 per cent.

In the absence of a merger between the two, Sainsbury’s and Asda will remain behind market leader Tesco in market share.

Analyst Fraser McKevitt said: “Sainsbury’s and Asda are continuing to battle it out for second place. Two thirds of the public were aware of the proposed merger: the majority of those who knew about the CMA ruling didn’t have an opinion as to whether it was a good or bad outcome, while only one third welcomed the decision.”

However, it secured second place in market share as it enjoyed double-digit growth online, while it is the first to trial a till-free supermarket in a trial at its Holborn store in London.

It was the only supermarket to see a fall in sales, with fellow big four member Tesco seeing sales rise one per cent, while Morrisons grew sales 0.6 per cent and Asda upping sales 0.3 per cent.

However, discounters Aldi and Lidl enjoyed the highest sales growth, with the German retailers up 11.6 per cent and 8.6 per cent respectively.

They also gained ground at the expense of their bigger, more established rivals – Aldi grew market share 0.6 percentage points to a 7.9 per cent stake, and Lidl up 0.3 percentage points to 5.7 per cent.

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While the big four retained their lead in market share, all saw a dip compared to the same time last year, with Tesco dropping 0.3 percentage points from 27.6 per cent to 27.3.

Asda dropped 0.3 percentage points to 15.2 per cent, and Morrisons fell 0.2 percentage points to 10.3 per cent.

Home delivery retailer Ocado saw sales grow 6.8 per cent to boost market share by 0.1 percentage points to 1.3 per cent, as it embarks on a £1.5bn joint venture with Marks & Spencer that will see it sell the supermarket's goods online.