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Business News

Lacklustre Morrisons loses big slice of market

Morrisons appears to have lost substantial market share to its rivals over the last month after the sales gap between it and that of Tesco, Asda and Sainsbury's widened, according to industry data.

Kantar Worldpanel revealed that Sainsbury's was the grocery sector's top dog, following its posting a market-busting 6.1 per cent rise in sales over the four weeks to 2 September, which included the second week of the Olympics. The market research firm also expects Sainsbury's to have benefited from its sponsorship of the Paralympics that ended on 9 September, although these figures won't be available until next month.

However, Morrisons delivered a lacklustre 0.5 per cent rise in revenues over the four weeks, compared with till-roll growth of 2.6 per cent across the sector.

The Bradford-based grocer's figures lagged Asda's 4.7 per cent and Tesco's 2.6 per cent, as well as Aldi's phenomenal 28.8 per cent and Waitrose's 10.3 per cent growth.

Edward Garner, a director at Kantar, suggested that sales at Morrisons were weaker because it does not have an online grocery offer and only has a small number of convenience stores, as these are the "two areas which are currently major contributors to the growth of its three main competitors".

But Morrisons' investors will be reassured by the fact that convenience and internet retailing are less profitable than large store operations.

Over the 12 weeks, Tesco's sales rose by 2.8 per cent – which was behind 3.3 per cent growth across the grocery sector – and its market share slipped by 0.1 per cent to 30.8 per cent, according to Kantar.

Dave McCarthy, an analyst at Investec, said: "Tesco must be disappointed. It has lost share and sales growth has lagged the industry average once again. This is despite a huge investment in new stores, a step up in store staffing levels and claims of being more price competitive."

Philip Clarke, Tesco's chief executive, unveiled a £1bn investment plan in April to turn around the performance of its UK operation. A key focus has been on improving the market leader's core food business. Kantar data seen by The Independent suggests that Tesco's food and drink performance has been ahead of the market over recent weeks.

Morrisons's total sales again lagged its rivals over the 12 weeks, with a 1.1 per cent rise. But this was ahead of an actual 1.2 per cent fall in sales at the Co-operative Group. Aldi's sales powered ahead by 26.6 per cent.