Tesco wins Big Four Christmas food battle

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German discounters Lidl and Aldi shared the title of Britain's fastest growing supermarket in the last three months of 2017, as the average household shrugged off economic worries to spend a record £1,054 on groceries, figures show.

The other members of the Big 4 - Sainsbury's, Asda and Morrisons - all saw gains of about 2% as overall sales for the sector rose 3.8% to £28.9bn compared to previous year. The combined market share of the two German supermarkets stood at 11.8%, up from 10.4% a year earlier, attracting almost one million additional households during the period, Kantar added. "Despite a successful festive period, Tesco is still growing behind the market with a 0.2 percentage point fall in market share to 28.0%", McKevitt said.

Separate market share figures from Nielsen, which were also released today, indicated that shoppers spent nearly £500 million more on groceries in December compared to the prior year, with Tesco also seeing the largest sales growth of the Big 4 in the final quarter.

At the other end of the scale, German retailers Aldi and Lidl both increased sales by 16.8% in the three months to December 31.

"With inflation outpacing income growth, shoppers continued to see more of their spending power absorbed by essential items, including food, leaving less left over for buying Christmas gifts". Across the whole of 2017, grocery sales rose 3.2 per cent on 2016. Morrison Supermarkets PLC's (MRW.LN) market share fell to 10.7% from 10.9%, although sales rose 2.1%. Aldi's market share rose from 6% to 6.8% in the final three months of the year, while Lidl now holds 5%. This was particularly helped by a strong online performance which saw the retailer's average shopping basket increase to just over 16 items. "It was in stark contrast to many high street retailers who saw less footfall and sales declines", said Mike Watkins, Nielsen's United Kingdom head of retailer insight.

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However, Tesco's market share has dropped to 27.5% in the 12 weeks ended December 30, unchanged from the comparable period a year earlier, while Sainsbury's fell to 15.5% from 15.8%, Asda fell to 14.2% from 14.4% and Morrisons fell to 10.2% from 10.4%, Nielsan data showed.

According to figures from the British Retail Consortium, food sales for the three months to December rose 4.2%, their biggest rise in six months.

Waitrose saw a 2.3% increase, Asda by 2.2%, Morrisons by 2.1% and Sainsbury's by 2%. Sainsbury's market share fell by 0.3 percentage points to 16.4%. Iceland grew sales by 2.9%.

Overall online supermarket sales enjoyed their biggest ever Christmas: up 4.9 per cent year-on-year. Supported by a 7% boost for own label sales, more than half of the increase came from products beyond the retailer's traditional frozen lines.