Tesco steps up UK sales as Asda struggles amid rising inflation | Supermarkets

While Tesco increased its sales and market share and took a larger share of Britons’ supermarket shopping, its rival Asda continued to struggle with rising food inflation.

According to Worldpanel by Numerator, the UK’s largest supermarket increased its market share to 28.3% in the 12 weeks to October 5, a 0.7 point increase compared to the previous year, while its sales increased by approximately 7%.

In contrast, Asda’s market share decreased by 0.9 points year-on-year to 11.8%, while sales fell by 3.2%.

The shift comes despite new chief executive Allan Leighton’s efforts to woo shoppers back by reducing prices and improving service in stores. The company announced cuts to 1,000 products last week, after discounting more than half of its products by an average of 22% last year.

Asda’s sales have been falling for more than a year as it loses out to larger rivals including Tesco and Sainsbury’s as well as discounters Aldi and Lidl.

Tesco’s sales growth outpaced most of its major rivals except Lidl, which increased sales by 10.8%. The German discounter is closing in on becoming Britain’s fifth-largest grocer, overtaking Morrisons with a market share of 8.2% compared to the Bradford-based chain’s 8.3%.

Worldpanel’s head of retail and consumer insight, Fraser McKevitt, said: “Households are dealing with many different things when choosing where and what to buy their groceries. As price rises accelerate, cost will inevitably be high on the list.

“Spending on offers has reached its highest level since April at 29.4% as consumers look for deals to ease the burden on their wallets. Promotions typically jump in as we approach the festive season, so this trend is likely to continue as we get closer to December.”

Grocery price inflation rose to 5.2% in the four weeks to Oct. 5 from 4.9% in the previous month, the highest level since July, according to Worldpanel.

Prices rose fastest for chocolate, fresh meat and coffee, offsetting declines in prices for toilet paper, sugary desserts and sparkling wine.

Despite the hunt for deals, more households are doing their grocery shopping online; This is perhaps a sign of an increased return to the office.

Grocers’ online sales accounted for 12.7% of their sales, up 12% from the same four weeks last year, according to Worldpanel, formerly known as Kantar. This was the highest share since March 2022.

More than one in five British households did their grocery shopping online at some point in September; This marked a return to popularity in the final stages of the Covid epidemic.