July 24, 2018 / 9:35 AM / 3 months ago

UPDATE 2-Sainsbury's put in the shade by takeover target Asda's sales growth - Kantar

    * Asda sales up 3.7 pct in 12 weeks to July 15 - Kantar
Worldpanel
    * Sainsbury's sales up 0.8 pct
    * Sainsbury's agreed 7.3 bln stg deal to buy Asda in April
    * Sainsbury's shares down 0.4 pct

 (Adds details of Kantar commentary, updates shares)
    By James Davey
    LONDON, July 24 (Reuters) - Asda, the British supermarket
arm of Walmart, recorded its strongest sales growth in
more than five years over the last quarter, while Sainsbury's
, which has agreed to buy its smaller rival, was the
laggard, industry data showed on Tuesday.
    Sainsbury's, Britain's second largest supermarket group,
sealed a 7.3 billion pound ($9.6 billion) takeover of Asda, the
number three, in April, a combination that will overtake Tesco
 as Britain's biggest grocery chain.
    The deal is currently being probed by Britain's regulator,
the Competition and Markets Authority, and if approved is not
expected to complete until the second half of 2019.
    Asda's sales rose 3.7 percent over the 12 weeks to July 15,
market researcher Kantar Worldpanel said, making it the best
performing of Britain's big four supermarket groups for the
first time since December 2014.
    In contrast Sainsbury's sales rose 0.8 percent, Tesco's
sales rose 2.3 percent and they were up 2.9 percent at No. 4
Morrisons.
    Shares in Sainsbury's were down 0.4 percent at 0915 GMT,
while shares in Tesco and Morrisons were up 0.3 percent and 0.5
percent respectively.
    Earlier this month Sainsbury's reported slowing sales growth
for its fiscal first quarter, blaming it on price cuts rather
than any disruption caused by the Asda deal.
    Asda, which has reported four straight quarters of
underlying sales growth, is due to update on second quarter
trading on August 16.
    
    OWN BRAND BOOST
    Fraser McKevitt, head of retail and consumer insight at
Kantar Worldpanel, said Asda was buoyed by a sales increase of 9
percent from its core, standard own-label lines which make up 40
percent of its sales.
    The market researcher said Asda and Morrisons held their
market shares, while Tesco and Sainsbury's lost share to the
discounters Aldi             and Lidl, whose sales rose 10.9
percent and 9.7 percent respectively.
    "Aldi and Lidl are now on the verge of hitting a combined
market share of 13 percent for the first time, though the
speculation over new entrants to the discount market could mean
new pressures on the two retailers," said McKevitt in reference
to a media report that Tesco is close to launching a chain of
discount stores in the UK called "Jack's" by converting up to 60
existing outlets.
    Total UK grocery sales rose 3.7 percent, the fastest rate of
growth this year, boosted by Britain's sunny weather and the
soccer World Cup. Alcohol was the stand-out seller.
    Grocery inflation was 1.8 percent for the 12 week period,
Kantar Worldpanel said, noting prices rose fastest in markets
such as butter, colas and canned fish.
    
    Market share and sales (percent)
                  12 wks to     12 wks to     pct change
                  July 15,      July 16,      in sales
                  2018          2017          
 Tesco            27.6          27.9          2.3
 Sainsbury's      15.6          16.0          0.8
 Asda             15.1          15.1          3.7
 Morrisons        10.5          10.5          2.9
 Aldi             7.5           7.0           10.9
 Co-operative     6.4           6.2           6.4
 Lidl             5.4           5.1           9.7
 Waitrose         5.0           5.1           2.8
 Iceland          2.1           2.1           4.5
 Ocado            1.2           1.1           8.5
    Source: Kantar Worldpanel
($1 = 0.7634 pounds)

 (Reporting by James Davey
Editing by Kirsten Donovan and Keith Weir)
  
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