Asda and Tesco extend lead over rivals

The lure of Tesco and Asda's non-food lines helped the two grocery giants extend their lead over lesser supermarket rivals over the Christmas period, figures published yesterday showed.

The lure of Tesco and Asda's non-food lines helped the two grocery giants extend their lead over lesser supermarket rivals over the Christmas period, figures published yesterday showed.

Tesco's share of all grocery sales hit 29 per cent in the 12 weeks to 2 January, according to the TNS Superpanel data, which tracks the market share of food retailers. The UK's top grocer, which issues its post-Christmas update next week, saw its market share surge 13 per cent.

Asda's share also leapt ahead, hitting 17.1 per cent during the period, up from 16.7 per cent 12 months ago. The Wal-mart-owned group said that out of the US group's 20 best-performing stores, 18 were Asda's.

The pair's growing dominance underlines the scale of the challenge facing J Sainsbury, which will reveal today how it fared over its peak period.

Sainsbury's market share has shrunk from 16.3 per cent a year ago to 15.9 per cent during the past three months, although the TNS data showed its rate of decline had slowed.

The troubled group has seen its share edge higher for four consecutive months. It has invested heavily in lower prices, cutting the price of 6,000 items during the past 12 months, taking a hit to its profits as a result.

Edward Garner, at TNS Superpanel, said: "Tesco's share increases were driven by more footage and a strong promotional offer in non-food. People did quite a bit of their Christmas shopping in its big out-of-town stores. It is growing across the board but electricals and clothing are likely to have done well." He predicted Tesco's would control one-third of the UK's total grocery market by this time next year.

He added: "We are seeing a pretty big fight between Tesco and Asda. Both have massive firepower in terms of their sourcing and promotions."

Yesterday's figures highlighted the fresh woes facing Wm Morrison, which shocked the City this week with news that its sales growth had stalled. The group's total market share dwindled to 12.4 per cent during the three-month period, down from 14.5 per cent 12 months ago. Safeway's market share almost halved to 4.8 per cent, reflecting in part the 56 stores that now trade as Morrisons.

Elsewhere, Waitrose, which is owned by John Lewis, saw its share surge to 3.6 per cent from 3.1 per cent. It reported underlying sales growth of 3.6 per cent over the Christmas period. Iceland was among the worst performers: its share slipped to 2.1 per cent.