Supermarket price war fails to save sector as it enters negative sales territory for first time on record

Catherine Neilan
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Tesco: The supermarket sector needs more than just a little help (Source: Getty)
The supermarket "price war" has failed to help kick-start sales, with the sector falling into negative territory for the first time since records began in 1994.
Sales were down 0.2 per cent for the 12 weeks to November 9, according to Kantar Worldpanel. The average basket price of everyday goods such as milk, bread and vegetables fell even further – down 0.4 per cent.
Competition from discount grocers such as Aldi and Lidl has been particularly influential, with Aldi benefiting from “the disruption within the grocery sector”, Kantar said.
Sales at the German business soared 25.5 per cent year-on-year, driving it to a record high market share of 4.9 per cent. Lidl has also performed strongly, with sales up 16.8 per cent, taking its market share to 3.5 per cent.
Premium supermarket Waitrose has managed to keep ahead of them however, growing its market share to 5.1 per cent.
The "big four" all experienced declines, with sales at Tesco down 3.7 per cent, Sainsbury's down 2.5 per cent, Morrisons down 3.3 per cent and Asda down 0.2 per cent.
While Tesco is continuing to lose market share, Kantar noted its rate of decline had slowed.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said:
The declining grocery market will be of concern to retailers as they gear up for the key Christmas trading season.
The fight for a bigger share of sales has ignited a price war which... is bad news for retailers, but good news for shoppers with price deflation forecast to continue well into 2015.

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