Tesco sales fall as Morrisons returns to growth and discounters Lidl and Aldi expand

Tesco continued to lose market share and saw its sales slump 1.3% in recent weeks, according to fresh supermarket data from Kantar Worldpanel, as Morrisons returned to growth and discounters Aldi and Lidl continued to surge.

Grocery market figures for the 12 weeks ending 24 May showed Morrisons was the only one of the big four retailers to see increased sales, with the first sales growth for 17 months being a marginal sales increase of 0.1%.

But having enjoyed improved sales at the start of 2015, Tesco sales decreased by 1.3% in the period and its market share fell by 0.4 percentage points to 28.6%, while Sainsbury’s held its share at 16.5% despite sales slipping 0.3%.

Morrisons on the other hand, after new chief executive David Potts began in mid-March, saw its market share remain unchanged at 10.9%.

Walmart-owned Asda saw its sales fall 2.4% after a round of price cuts, but German discounter Lidl reached a new record high market share of 3.9%, up from 3.6% last year as it enjoyed sales growth of 8.8% in the period.

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Kantar said Lidl’s growth was fuelled by a combination of increased shopper footfall and greater average basket size, demonstrating increased consumer willingness to move their bigger shopping trips to discount chains.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “All of the major supermarkets are finding growth difficult as prices have been declining since September 2014.

"Yet while like-for-like groceries are 1.9% cheaper than this time last year this is not as steep a fall as last month, when prices were down by 2.1%. This means that if current trends continue, prices will once again start rising by the end of the year.”

On Morrisons he added: “A committed core of loyal Morrisons consumers is responding positively to recent initiatives and business has been boosted by online sales. Morrisons’ performance is an improvement on what was a difficult May 2014, so this is only the first step in any future recovery.”

Aldi also grew sales by 15.7%, taking share to 5.4% of the market.

Waitrose increased market share to 5.2% thanks to sales growth of 1.6%. Kantar pointed out that this was helped by a regional bias towards southern Britain, where grocery sales are growing more quickly – particularly in London.

Iceland also returned to growth for the first time in a year this period, increasing sales by 1.9%.

Kantar's data one month ago showed the 'Big Four' supermarkets all lost market share, with Sainsbury's performing best of the bunch and Asda the worst hit. For the 12 weeks to 26 April, Tesco market share shrunk 0.4 percentage points to 28.4% as sales fell 1%, while Sainsbury's lost just 0.1 point to a 16.5% share as its sales dipped 0.2%. Sales at Morrisons declined by 1.1% on a year ago and its market share was at 10.9%.