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Supermarket sales rally in UK, Morrisons best in five years

Staff Writer |
Led by a growth spurt at Morrisons the like of which it has not enjoyed in five years, UK supermarket sales grew at their fastest rate in almost two and a half years.

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Grocery sector sales grew 2.3% in the 12 weeks ending 26 February compared to the same time last year, helped by Sainsbury's returning to growth for the first time in a year and Tesco increasing sales for the sixth period in a row, according to a survey by Kantar Worldpanel.

Supermarket prices kept crawling higher, with like-for-like inflation doubling since last month to an annual increase of 1.4%, with small price rises across staples including butter, tea and fish.

Morrisons accelerated ahead of the rest of the sector with a 2.6% sales increase that was its fastest growth in five years, enabling it to hold market share steady at 10.6%.

Tesco lost market share, down by 0.5 percentage points to 27.9%, even though sales picked up for the sixth period in a row, which Kantar said was the first run like that since January 2014.

Sainsbury's also gave up some market share but bounced back to growth with sales up 0.3%. Its market share slipped by 0.3 percentage points to 16.5% of the market.

The reason for the loss of market share was strong growth elsewhere, especially the continued surge of German discounters Aldi and Lidl, which grew sales 12.9% and 13% respectively for market shares of 6.3% and 4.6%.

Meanwhile, Asda was the only supermarket group to see sales fall, though Kantar pointed out that a decline of just 0.8% represents a significant improvement on recent woes and is its best performance since November 2014.

Nevertheless, its market share shrank from 16.2% to 15.7%, though it still retains a much large slice than fourth-placed Morrisons' 10.6%.

Iceland also grew sales at a rapid 8.8%, with Waitrose expanding its total till roll 2.9% and Co-Op by 1.7%.