TOP NEWS: Asda Overtakes Bidder Sainsbury's In UK Market Share

LONDON (Alliance News) - German discounter Aldi was the fastest growing supermarket in the UK in the 12-weeks to the end of March, according to the latest Kantar grocery market survey released on Tuesday, Asda replaced proposed merger partner Sainsbury's as the UK's second biggest supermarket by market share.

The research agency - reporting market share figures for the 12 weeks to March 24 - said that Aldi welcomed 13 million households through its doors in the period, more people than the UK's fourth biggest grocer Wm Morrison Supermarkets PLC.

The discounter achieved a record market share of 8.0% after growing sales 11% on a year before in the period.

Meanwhile, UK supermarkets as a whole saw sales over the 12-week period up 1.4% year-on-year, the slowest rate in a year due to the later timing of Easter and Mother's Day.

Figures show that despite Easter being a month away, Britons have already spent GBP146 million on Easter eggs, with 42% of households having already bought hot cross buns.

Amid a spring clean splash, sales of carpet cleaners were up 18% in the period and sales of accessories, such as cloths and sponges, rose 9% compared with this time last year.

Sustainability trends and a watchful eye over single-use plastics contributed to sales of loose fruit and vegetables growing twice as quickly as those wrapped in plastic, Kantar said.

"Consumers are applying pressure on the retailers when it comes to packaging and making their feelings known in the fruit and vegetable aisles – 21% of fruit, vegetable and salad items were sold loose over the past 12 weeks, with sales growing twice as quickly as packaged produce," Head of Retail & Consumer Insight Fraser McKevitt said.

UK grocery inflation now stands at 1.5%, Kantar reported, with prices rising since January 2017. Prices are rising fastest in markets such as cola, crisps and chilled deserts, while falling in instant coffee, fresh sausages and nuts.

With Aldi toppling the scales, German peer Lidl followed closely as the second fastest growing UK supermarket, with sales increasing 5.8% and market share growing by 0.3 percentage point to 5.6%, with particularly strong growth of bakery goods, frozen foods and biscuits.

The UK's biggest supermarket, Tesco PLC saw sales up 0.5%, however its market share declined 0.2 percentage point to 27.4%.

Walmart Inc-owned Asda increased sales by a miniscule 0.1% in the 12-week period but kicked out J Sainsbury PLC from the second step of the podium reaching the title of second biggest UK supermarket by market share, with 15.4%.

"Asda's performance has been fuelled by attracting a greater number of affluent households and shoppers making more regular trips," McKevitt said.

Asda and Sainsbury's are in the process of merging, but face high regulatory hurdles after the UK antimonopoly regulator, the Competition & Markets Authority found serious competition concerns in their tie-up, suggesting it will not be allowed to proceed.

The CMA will publish its final decision on the merger on April 30.

Sainsbury's, now the third biggest UK supermarket, saw sales drop 1.8% as it lost 0.5 of a point from its market share, down to 15.3%.

"Despite being overtaken by Asda in main store sales, Sainsbury's remains the biggest seller of food and drink out of the two retailers, and these figures do not include Argos," McKevitt noted.

Morrisons was the only other supermarket seeing a decline in sales, dipping 0.1% over the period, as shoppers pick up fewer items. Its market share now stands at 10.3% down from 10.4% a year ago.

Growth accelerated at Co-op with sales up 6.1%, due to new store openings and focus on own brand lines. Co-op market share increased 0.1 percentage point to 6.1%.

Meanwhile, online grocer Ocado Group PLC's market share reached a new high of 1.3% share after seeing sales up 5.5%.

Frozen food specialist Iceland Foods' sales were up 0.6% with the retailer's market share flat at 2.1%.

Lastly, premium supermarket Waitrose, part of the John Lewis Partnership, saw sales rise 1.3% and held its market share steady at 5.0%.

Tesco shares were up 0.5% early Tuesday, while Morrison was up 0.2%. Sainsbury's and Ocado were down 0.7% and 0.2% respectively.