Sainsbury's trails rivals as supermarkets enjoy summer boom

Sainsbury's sales rebounded in recent weeks but it continues to lag behind its big supermarket rivals as all of the big four enjoyed their best period of growth so far this year.

Sainsbury’s grew sales 0.8% in the 12 weeks to 15 July, fresh data from Kantar Worldpanel showed on Tuesday, following the previous month's report that showed the UK's second-largest grocer's sales fell 0.2%. Sainsbury's market share remained at 15.6%, down 0.4 percentage points from a year ago.

Asda, Sainsbury's proposed merger target, meanwhile increased sales 3.7%, which was its strongest growth in more than five years and it was the best performing of the big four for the first time since December 2014.

Market leader Tesco’s overall growth increased to 2.3%, while third-placed Morrisons grew 2.9%.

Kantar's head of retail and consumer insight, Fraser McKevitt, said Morrisons' premium line has outperformed its cheaper own-label options, helping the retailer to continue a run of growth stretching back to January 2017.

Overall, supermarket sales expanded 3.6%, their fastest rate this year, which Kantar put down to the World Cup and prolonged hot weather.

“England may not have won the World Cup – but its journey to the semi-finals not only helped to kickstart the summer, but supermarket sales to boot," said McKevitt.

“Over the past month, football-frenzied customers visited supermarkets an extra 13 million times as they hurried to stock up on World Cup-viewing essentials, with alcohol in particular the stand-out winner. Christmas and Easter aside, the week that the England football team played both Colombia and Sweden saw more spent on alcohol than ever before – a colossal £287m.”

England football team sponsor Lidl saw sales increase by 9.7% and increased its market share by 0.3 percentage points to 5.4% compared to this time last year.

Fellow discounter Aldi returned to double-digit growth – with sales up by 10.9% – to reach a market-share high for the retailer of 7.5%.

"Aldi and Lidl are now on the verge of hitting a combined market share of 13% for the first time, though the speculation over new entrants to the discount market could mean new pressures on the two retailers,” McKevitt said.

The warm weather saw barbecuing take off, with sales of firelighters and fresh burgers rocketed by 47% and 30%, while sun care products jumped by 38%.

McKevitt said warm weather not only impacted what customers buy, but where they choose to buy their groceries from, with Co-op experiencing its highest recorded since October 2011 and shoppers returning to Co-op stores on average a record 10.1 times over the month, which he put down to "shoppers’ desire to maximise the sunshine encouraged them to shop more locally".

E-commerce specialist Ocado enjoyed sales growth of 8.5%, down from 10.1% in the previous period, and its market share remained at 1.2%.