The latest Kantar Worldpanel data showed that sales at Leeds-based Asda slumped 3.9 per cent in the 12 weeks to March 27 while Bradford-based Morrisons’ sales fell 2.4 per cent, although this was largely due to store closures.
Asda has refused to join in the sharp discounting offered by its rivals as they attempt to lure shoppers back from German discounters Aldi and Lidl.
Aldi saw sales rise 14.4 per cent, giving it a market share of 6.0 per cent, while Lidl sales rose 17.7 per cent to give it a market share of 4.4 per cent.
Asda is suffering from its lack of convenience stores as shoppers switch from a big weekly shop to smaller, more frequent shopping trips.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Big stores are suffering and Asda only has big stores.
“We haven’t seen the impact of Asda’s recent price cuts. We are not seeing that yet in the data. When Asda cut prices last year there wasn’t as big a sales lift as they hoped for.”
He said that Morrisons sales were down primarily because of store closures.
Over the past year Morrisons has sold its convenience business M Local, which had 140 stores, and closed five per cent of its stores. It reported like-for-like sales growth of 0.1 per cent in its most recent quarter as changes by chief executive David Potts start to take effect. Mr Potts hopes to return Morrisons to its former glory by focusing on low prices and quality food.
“Morrisons’ online business is growing very quickly, but that’s not quite enough to offset the fact they have fewer stores,” said Mr McKevitt.
“I think they’ll be happy to see an improvement on last month’s figures.”
Analyst Clive Black at Shore Capital said: “We see steady improvement in Morrisons’ proposition, which we believe its customers are responding favourably too, albeit remains still early days in the David Potts revolution.
“We are less sanguine about Asda, which is facing its own perfect storm to our minds; the ongoing face-to-face battle with the discounters plus the constraint of self-improving value based superstore peers.
“Asda continues to lose market share apace, whilst the brain drain from the retailer also remains a concern.
“Despite the correct analysis and assessment of the market’s developments, Asda does not quite seem to have squared this with its proposition, its stores currently appearing very functional. We worry that Wal-Mart (Asda’s US parent) is squeezing Asda too tight.”
The sales decline at market leader Tesco slowed for the fourth month in a row in a sign that Britain’s biggest retailer is recovering.
Tesco’s chief executive Dave Lewis is trying to revive Tesco with a focus on lower prices, improvements to product availability and customer service, along with better relationships with suppliers.
Tesco’s sales slipped 0.2 per cent in the 12 weeks to March 27.
“A small increase in shopper numbers suggests Tesco could return to growth in the next few months - welcome news after 12 months in decline,” said Mr McKevitt.
Sainsbury’s, the second largest player, outperformed its “big four” rivals with a sales increase of 1.2 per cent. Kantar said that Sainsbury’s February announcement that it is scaling back multi-buy promotions hasn’t hit sales.
The Co-operative saw sales increase by 3.9 per cent. Kantar said that consumers have been visiting Co-op stores more frequently, especially for fresh food and own label products.
UK grocery sales increased 1.1 per cent year on year - the fastest growth in 12 months, boosted by the early Easter holiday.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “An early Easter gave the market a sales boost of £152m compared to last year, adding 0.6 per cent to the overall growth rate. Britain’s love of all things sweet was in evidence, with 63 per cent of households buying at least one chocolate egg during March, spending an average of £12 over the month.
“Over half of the population bought hot cross buns, while 15 per cent purchased a fresh leg of lamb for their Easter celebrations.”
Deflation was 1.5 per cent, reflecting lower prices for butter, sausages and crisps.