Asda is lagging behind its peers with sales falling nearly twice as fast as arch rival Tesco, according to the latest data from Kantar Worldpanel.
Leeds-based Asda, which has announced plans to revamp a third of its big store estate and axe the opening of new stores in London, saw sales fall 3.0 per cent in the 12 weeks to October 11.
Sales at Tesco, the UK’s biggest retailer, fell 1.7 per cent and Bradford-based Morrisons saw sales dip 1.0 per cent. Sainsbury’s was the only one of the big four to see a sales rise with a 1.1 per cent increase.
The sales falls were in sharp contrast to discounters Aldi and Lidl, which both enjoyed growth of over 17 per cent, as more shoppers switch in search of cheaper prices.
Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight, said: “The discounters are opening more stores and their marketing is appealing to shoppers.”
However he doesn’t believe the discounters will ever replace the big four as they offer such a smaller range.
“Hardly anyone is doing most of their shop at the discounters,” he said.
Talking about Asda’s performance, Mr McKevitt said: “The indication is that they are letting sales slide for profits. Asda’s challenge is they don’t have a convenience estate.
“With convenience, you have to get it right. Morrisons got it wrong. Asda is quite canny. They are saying: ‘We will invest in what we know’.”
Morrisons’ 1.0 per cent decline was better than the previous 1.4 per cent fall, but Mr McKevitt said it was too early to call it an improvement.
“Morrisons’ decision to close stores is likely to lose shoppers, sales and market share. They are focusing on fixing the internal workings of the business,” he said.
Kantar said there are no signs of trading getting any easier for the big four.
“With like-for-like grocery prices 1.7 per cent lower than last year, the supermarket price war shows no signs of abating,” said Mr McKevitt. The fall means that shoppers saved an average £58 over the past year.
Falling prices reflect the supermarket price war and deflation in key products such as eggs, bread, butter and crisps.
“Consumers have now enjoyed more than 12 months of continually falling prices and are currently pocketing these benefits rather than splashing out on more grocery items,” said Mr McKevitt.
He said that this is unlikely to change.
“If you get a pay rise you won’t splash out on a Tesco shop,” said Mr McKevitt.
He said that there is a trend towards turning spare space into cafes and winebars in an attempt to turn the weekly shopping trip into more of a leisure experience.
“You can now buy a glass of wine in Waitrose. It’s an indication of how to use the space,” he added.
Separate research from Nielsen showed a difficult month for the grocers.
“Deflation, discounters and weak volume growths have meant a challenging four weeks for the supermarkets – despite the relatively warm weather and the Rugby World Cup,” said Nielsen’s Mike Watkins.