Sainsbury’s overtakes Asda following merger collapse

Sainsbury’s has taken back second position in market share from Asda, just days after their proposed merger was blocked by the Competition and Markets Authority.

Leeds-based Asda increased sales by 0.3% to achieve a market share of 15.2% but it wasn’t enough to stay ahead of Sainsbury’s, even though the retailer saw a sales decline of 1.2%.

Meanwhile, Bradford-based Morrisons achieved a 10.3% market share, putting it comfortably ahead of the fifth largest retailer, Aldi according to analysis from Kantar Worldpanel. Kantar said that alcohol sales were the biggest contributor to Morrisons’ 0.6% growth this period.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Sainsbury’s and Asda are continuing to battle it out for second place. Two thirds of the public were aware of the proposed merger: the majority of those who knew about the CMA ruling didn’t have an opinion as to whether it was a good or bad outcome, while only one third welcomed the decision.”

HE said that the average Asda shopping basket increased in value and shoppers visited more often. Mr McKevitt said Asda remained strong in its northern heartland with the north of England and Scotland accounting for more than 40% of sales.

Overall, the grocery sector grew at its fastest rate this year, helped by a record £2.5 billion Easter spend.

Earlier this month, Kantar announced that Asda had overtaken Sainsbury’s to become the UK’s second largest supermarket.

In the 12 weeks to 24 March, Asda’s sales rose 0.1%. This took its total market share to 15.4%, while Sainsbury’s slipped just below this level to a 15.3% market share after sales at the supermarket fell 1.8% in the same period.

This follows the announcement by the Competition and Markets Authority last week that the £7bn merger between Asda and Sainsbury’s would be blocked. They cited lack of competition on a local and national level for their decision.

Sainsbury’s CEO Mike Coupe, said at the time: “The specific reason for wanting to merge was to lower prices for customers. The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is today effectively taking £1bn out of customers’ pockets.

The merger, which would have seen Sainsbury’s take over Walmart-owned, Leeds-based Asda, was first announced in April 2018.

It would have seen a mega-merger of the two supermarkets, who are both facing pressure from European challenger supermarkets Aldi and Lidl. Last month Aldi was the only one of the UK’s top supermarkets to see double digit sales growth, as it inches its way into the country’s Big Four.