April 2, 2019 / 7:38 AM / 3 months ago

UPDATE 2-Asda overtakes suitor Sainsbury to become UK's No. 2 supermarket - Kantar

 (Adds detail, table, shares)
    LONDON, April 2 (Reuters) - Sainsbury has lost its
status as Britain's No. 2 supermarket group by market share to
takeover target Asda for the first time in four years, industry
data showed on Tuesday.
    Sainsbury's sales fell 1.8 percent over the 12 weeks to
March 24, reducing its market share to 15.3 percent from 15.8
percent in the same period last year, researcher Kantar said.
    That meant Asda, the British arm of U.S. retailer Walmart
, overtook Sainsbury with a market share of 15.4 percent
as its sales edged up 0.1 percent, though Sainsbury remained the
biggest seller of food and drink of the two.
    Sainsbury argues that Kantar under-reads its general
merchandise market share. This is because since acquiring Argos
in 2016, Sainsbury has streamlined general merchandise ranges in
its stores in favour of Argos ranges. However, Argos' sales are
not captured by Kantar.
    Sainsbury's agreed 7.3 billion pound ($9.5 billion) takeover
of Asda is being considered by Britain's competition regulator.
    The Competition and Markets Authority (CMA) said last month
its initial view was that the deal should be blocked in the
absence of the sale of a large number of stores, or even one of
the brands. A final report is due by April 30.
    "Walmart's subsidiary seems to be holding up much better to
the growing Sainsbury's merger uncertainty," said analysts at
Jefferies.
    Sainsbury shares, down 26 percent over the last six months,
were down 0.9 percent at 232.5 pence by 0825 GMT, giving it an
equity value of 5.1 billion pounds.
    Kantar's data also showed Tesco's sales rose 0.5
percent in the period and it remained the clear market leader
with a share of 27.4 percent. Sales at No.4 player Morrisons
 fell 0.1 percent, giving it a market share of 10.3
percent.
    However, all of Britain's big four supermarkets lost market
share to German-owned discounters Aldi            and Lidl.
Their sales increased 10.6 percent and 5.8 percent respectively,
giving them a combined market share of 13.6 percent.
    Kantar said overall UK grocery sales grew 1.4 percent in the
period, the slowest rate since March 2018, reflecting a later
Easter this year and Mother's Day falling outside the reported
period.
    The market researcher said grocery inflation was 1.5 percent
over the 12 weeks. Prices are rising fastest in markets such as
cola, crisps and chilled deserts, while falling in instant
coffee, fresh sausages and nuts.
    The following table shows market share and sales growth
(percent):
                  12 wks to     12 wks to     pct change
                  March 24,     March 25,     in sales
                  2019          2018          
 Tesco            27.4          27.6          0.5
 Asda             15.4          15.6          0.1
 Sainsbury's      15.3          15.8          -1.8
 Morrisons        10.3          10.4          -0.1
 Aldi             8.0           7.3           10.6
 Co-operative     6.1           6.0           3.9
 Lidl             5.6           5.3           5.8
 Waitrose         5.0           5.0           1.3
 Iceland          2.1           2.1           0.6
 Ocado            1.3           1.2           5.5
    Source: Kantar
    
($1 = 0.7670 pounds)

 (Reporting by James Davey
Editing by Paul Sandle and David Holmes)
  
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