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Morrisons and Sainsbury's shares tank after Kantar reveals drop in market share

Last updated: 10:20 12 Dec 2017 EST, First published: 04:38 12 Dec 2017 EST

Morrisons
Morrisons is the biggest faller on the FTSE 100

Shares in Morrison Supermarkets PLC (LON:MRW) and J Sainsbury plc (LON:SBRY) plunged on Tuesday after industry data showed the supermarket chains both lost further market share in the 12 weeks to 3 December.

Tough competition from discounters Aldi and Lidl continued to chip away at market share of the so-called ‘big four’ supermarkets during the period, while grocery inflation hit its highest level since 2013, Kantar Worldpanel revealed.

READ: J Sainsbury more at risk than peers from downturn in UK economy, reckons Jefferies

Morrisons’ market share fell to 10.6% from 10.8% the same period a year ago, despite sales rising 1.4% year-on-year.

Sainsbury’s market share dropped to 16.3% from 16.5% while sales edged up 2%.

Tesco was the best performing of the big four, with sales up 2.5% even as its market share fell to 28.2% from 28.3%.

Asda sales climbed 1.2% with market share dipping to 15.0% from 15.3%.

Aldi the fastest growing grocer

Aldi was the fastest growing grocer during the period with sales boosted by chilled food products, including ready meals and desserts.

Its market share rose to 6.9% from 6.2% and sales rose 15.1% as it continued to open more stores. 

Lidl’s market share increased to 5.1% from 6.2% and sales grew 14.5%.

Overall, UK grocery sales rose 3.1% despite the pressure of higher inflation on UK consumers.

Morrisons and Sainsbury's remnained the biggest fallers on the FTSE 100 in late afternoon trading with their shares down 5.2% to 210p and 4.6% to 233.4p respecively, while Tesco shares were down 0.6% at 204.25p.

Grocery inflation highest level since 2013

Grocery inflation reached 3.6%, driven by price rises in butter, fish and fresh pork.

A sharp fall in the value of the pound since the Brexit vote last year has pushed import costs higher, putting a strain on supermarkets that have been trying to keep prices low to attract hard-hit customers in a competitive environment. 

But higher inflation did not stop consumers from spending money on alcoholic and non-alcoholic drinks ahead of Christmas. 

“Alcohol sales are up by nearly £172mln compared to this time last year and while volume sales have increased, this impressive growth is mainly a result of consumers choosing more expensive festive tipples," said Fraser McKevit, head of retail and consumer insight at Kantar.

“Gin, whisky and sparkling wine all saw significant growth: up by 26%, 10% and 7% respectively as shoppers pushed the boat out.”

"Still small but growing rapidly, non-alcoholic beer is the new kid on the block this Christmas – growing sales by 27% during the past 12 weeks.”

 -- Updates share prices --

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