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Asda continues slump as Tesco steadies in contracting market

Published:  08 March, 2016

The ongoing contraction in the UK's supermarket continued through February, according to the latest data from Nielsen, with sales down 0.8% by volume and 1.1% by value.

It is the sixth month in a row that sales volumes have declined.

Asda's sliding market share continued its downward progress, dropping 5% in the 12 weeks to February 27.

The company recently reported like-for-like sales down 5.8% in the fourth quarter of 2015, which covers the vital Christmas trading period.

Tesco recorded its lowest year-on-year sales decline for more than two years, Nielsen reported, with sales down 0.5%.

The figures represent the troubled retailer's third consecutive quarter of improvement and its best performance in over two years.

Discount retailers Aldi and Lidl continued their rapid expansion, posting growth of 17.1% and 15.7% respectively.

Together, they now command 11% market share, up from 9.6% in the same period last year.

Marks & Spencer posted growth of 4.1%, The Co-operative 1.1% and Waitrose 0.4%.

Among the Big Four retailers, only Sainsbury's managed to hold steady, flatlining at 0% year on year.

Mike Watkins, Nielsen's UK head of retailer and business insight, said. "Building on the sometimes overlooked fact that three in four households shop there, Tesco has been improving the basics, including its pricing. This has encouraged more visits and attracted back shoppers who'd previously defected.

"Their new customer proposition highlights the benefits of having a large variety of store types - physical and online. Supermarkets offering more locations, good private label and a superior customer experience - not just lower prices - tend to be more successful, and these are some of the areas where Tesco are focusing.

"The Co-operatives are gaining share with a virtuous growth cycle of more shoppers visiting more often, which will be enhanced by further price cuts during the rest of the year. Meanwhile, Morrisons' sales growth is still impacted by store closures and disposals, as well as the new 'Price Crunch' initiative.

"Early indications show that this marketing campaign may help them hold on to current shoppers and improve volume growths in the run up to Easter."