Aldi, Ocado, Morrisons, Tesco and Sainsbury's are all making moves to win market share, but Asda's next step is unclear

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Leading UK Supermarkets Compete For Their Share Of The Market In The Run Up To Christmas
Most of the UK's supermarkets are making progress, according to new data (Source: Getty)

The latest supermarket sales data has painted a slightly less gloomy picture than has become customary for Britain's big four grocers, hinting that the billions poured into lowering prices and luring back customers might finally be paying off.

Despite a brutal price war that has savaged Tesco, Asda, Sainsbury’s and Morrisons, data from Kantar has shown a 0.5 per cent uptick in food sales growth after months of stagnation. Small progress, but progress nonetheless.

Individually, Tesco continues to stem declines, with the company's turnaround under Dave Lewis finally appearing to bear fruit. And according to statistics from Nielsen, Tesco delivered its best twelve week performance since November 2013. Sainsbury’s recorded growth of 0.5 per cent, Morrisons and Asda were battered, and Aldi and Lidl saw growth rocket.

Looking beyond the data, what is more interesting is the repositioning taking place within the sector.

Read more: Asda and Morrisons struggle as Tesco stems declines

Sensible supermarkets are trying to rectify structural problems in their bricks and mortar estates – namely too many big stores – while positioning themselves for a dual digital and physical future. Morrisons, which recently got into bed with Amazon by inking a supply agreement with the firm, actually saw online sales increase.

Sainsbury's is attempting to acquire Argos in a bid to fend off future threats from Amazon. And Aldi yesterday ramped up the range of its online products. All are clarion signs that the battle for customers will, eventually, be held in the digital sphere.

While supermarkets are currently finding it difficult to turn a profit online, it is only a matter of time before this changes. The UK's online grocery market is worth just shy of £10bn a year, is the second largest in the world after China and is forecast to grow to £17.2bn by 2020, according to IGD.

Tesco and Sainsbury’s already benefit from their established websites, while Ocado continues to see strong growth. It is becoming less and less clear what Asda's strategy is. Having announced in 2014 that it was going to “lead online”, last year it abandoned plans to grow its click-and-collect service. If the next price war is to be fought online, then now is the time to load up your guns.

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