The supermarket price war has led to the first decline in grocery sales in 20 years as discounters Aldi and Lidl steal customers from the “big four” supermarkets.
The latest grocery share figures from Kantar Worldpanel for the three months to November 9 show the amount spent on grocery shopping has fallen by 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’s sales were up 26 per cent while Lidl’s 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.”
Aldi 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 rose from 3.0 per cent to 3.5 per cent.
Asda’s market share held steady at 17.2 per cent while Morrisons’ declined from 11.5 per cent to 11.1 per cent.
“Morrisons’ numbers are not particularly great,” said Mr McKevitt.
“They are not seeing the benefit of their loyalty card yet. They’re in a difficult place at the moment, waiting for Morrisons Local and online sales to come through.”
He said that Asda performed very well.
“Consumers have really reacted well to their simple pricing,” he said.
Tesco’s share fell to 28.7 per cent.