The supermarket price war has led to the first decline in grocery sales in 20 years as discounters Aldi and Lidl continue to steal customers from the Big Four supermarkets.
The latest grocery share figures from Kantar Worldpanel for the three months to November 9 show sales have fallen 0.2 per cent, the first fall since records began in 1994.
Kantar said the declining grocery market will be of concern to retailers as they gear up for the key Christmas trading season.
Aldi sales are up 26 per cent while Lidl sales rose 17 per cent.
Leeds-based Asda was the best performer out of the Big Four with sales down 0.2 per cent, in line with the market.
Bradford-based Morrisons sales were down 3.3 per cent while Sainsbury’s sales fell 2.5 per cent.
Market leader Tesco was the worst performer with sales down 3.7 per cent, although this was an improvement on previous declines.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “The fight for a bigger share of sales has ignited a price war which means an average basket of everyday goods such as milk, bread and vegetables now costs 0.4 per cent less than it did this time last year.
“This is bad news for retailers, but good news for shoppers with price deflation forecast to continue well into 2015.”
He said that Aldi continues to benefit from the disruption within the grocery market. The German discounter now has a record high market share of 4.9 per cent, up from 3.9 per cent last year.
Lidl also performed strongly and its market share has grown from 3.0 per cent to 3.5 per cent.
At the other end of the market, Waitrose increased sales by 5.6 per cent taking its market share to 5.1 per cent.
Kantar said the major supermarkets have all had a difficult period, hit by both the flow of shoppers toward the discounters and reduced revenues as they competitively cut prices.
Asda’s market share held steady at 17.2 per cent while Morrisons’ declined from 11.5 per cent to 11.1 per cent.
Sainsbury’s was down from 16.8 per cent to 16.4 per cent and Tesco fell from 29.8 per cent to 28.7 per cent.