Grocery price war continues: Tesco’s rebound hurts Asda as Aldi reaches record market share

The sector as a whole is still hugely competitive: the grocery price war has driven supermarket deflation to a record level of 1.6 per cent for the 12 weeks to March 1. Kantar estimated that this had saved British shoppers £400m during the quarter. 

 

Within the sector, Tesco is pushing ahead as the best of the big four supermarkets, posting its strongest performance in 18 months. 

 

The UK's biggest retailer grew sales by 1.1 per cent, helped by weak comparatives from the same period in 2014. Its market share is now down just 0.1 percentage points on last year. 

 

“Among the big four supermarkets Tesco has been the stand-out retailer,” said Kantar's head of retail and consumer insight Fraser McKevitt, who noted that Asda – “which competes for many of the same shoppers as Tesco” – had lost out as a result

 

Sales at the Wal-mart owned grocer were down 2.1 per cent, and its market share dropped by 17 per cent. 

 

Morrisons and Sainsbury’s both grew behind the market average with sales falling by 0.4 per cent and 0.5 per cent respectively.

 

Meanwhile the usual suspects – discounters Aldi and Lidl, and premium grocer Waitrose – continue to grow, up 19.3 per cent, 13.6 per cent and 4.9 per cent respectively.

 

Aldi has reached a record five per cent market share, although Waitrose has kept ahead with 5.2 per cent of total spend. Lidl took 3.5 per cent. 

 

This was, however, Aldi's slowest rate of growth since June 2011. 

 

McKevitt said: “All of the major supermarkets are cutting prices to win shoppers, especially within everyday staples such as eggs, vegetables and milk.  Retailers are focusing their efforts on simple price cuts rather than complicated ‘multibuy’ deals."