Sainsbury's growth overtakes Asda

J Sainsbury scored a rare victory over Asda yesterday when new research showed its rate of growth trounced its Wal-Mart-owned rival for the first time in a decade. The figures, from the market research firm TNS, underscore Sainsbury's nascent recovery, led by Justin King, the chief executive.

J Sainsbury scored a rare victory over Asda yesterday when new research showed its rate of growth trounced its Wal-Mart-owned rival for the first time in a decade. The figures, from the market research firm TNS, underscore Sainsbury's nascent recovery, led by Justin King, the chief executive.

Sainsbury's market share growth rate accelerated to 4.1 per cent during the 12 weeks to 27 March, while Asda's slowed to 3 per cent. The improvement took Sainsbury's share of the total grocery market to 15.9 per cent during the period, against 15.7 per cent this time last year. Asda's market share was flat at 16.6 per cent. To put that into context, Tesco, which is almost twice the size of its nearest rival, Asda, achieved 11.4 per cent growth year on year.

Peter East, a director at TNS Superpanel, said: "Tesco continues to be the strongest, but the focus is towards Sainsbury's, whose recovery appears invigorated, as it strives to address well-publicised price competitiveness and availability issues."

Sainsbury's, which ceded its position as the number two supermarket group to Asda in July 2003, recently reported its first rise in underlying sales for two and a half years while Asda's star is waning.

Mr East said yesterday's figures, which came two days after Tesco and Asda unveiled £167m of price cuts, indicated an "intensifying battle among the leading grocery retailers for market share". He warned that Sainsbury's resurgence would put "further pressure" on Wm Morrison, which recently saw like-for-like sales go into reverse at its core supermarket estate.

Analysts at Citigroup said: "Asda's loss of momentum is still evident and is perhaps somewhat surprising, given its overlap with a disrupted Morrison. It looks like Tesco and Sainsbury's are winning share from disgruntled Safeway shoppers."