Sainsbury's sales slump as rivals surge ahead boosted by gin and soft drinks

Proposed merger partner Asda boosted its sales by 1.8 per cent while Lidl posted double-digit growth

Asda has turned around its fortunes while Sainsbury’s has lost market share (Reuters)

Sales at Sainsbury’s fell in the last quarter, while all of its big four supermarket rivals posted increases, new data revealed on Tuesday.

Sainsbury’s sales slipped 0.2 per cent in the 12 weeks to 17 June, taking the UK’s second-largest grocery seller’s market share down 0.4 percentage points to 15.6 per cent, Kantar Worldpanel said.

In contrast, Sainsbury’s proposed merger partner Asda boosted its sales by 1.8 per cent.

Morrisons posted the strongest growth among the leading supermarket chains, increasing sales by 1.8 per cent compared to the same period last year. The UK’s leading supermarket, Tesco, increased its sales by 1.4 per cent.

All of the top four continued to lose ground to German discount chains Aldi and Lidl, which posted sales rises of 8.2 per cent and 10 per cent respectively. Aldi now has a market share of 7.4 per cent while its rival is on 5.4 per cent.

Overall, UK grocery sales rose 2.1 per cent in the period and have now experienced two years of sustained growth, the data showed.

While the figures mostly relate to the period before recent hot weather, they already show that supermarkets have been boosted by an additional half a billion pounds of spending compared to last year, with particularly strong sales of spirits, soft drinks and hay fever remedies.

The numbers suggest summer has already begun for many, said Fraser McKevitt, head of retail and consumer insights at Kantar Worldpanel.

“Shoppers have already splashed out 6 per cent more on spirits, and gin sales alone have increased by £38m and 1.7 million litres, while soft drinks are up 7 per cent,” he said.

“Consumers are also feeling some seasonal downsides – sales of hay fever remedies are up by 19 per cent year on year and have been bought by 5.7 million households, reflecting Met Office predictions of record pollen levels.”