Tesco and Asda are still getting crushed by cheaper rivals

Two of Britain’s biggest supermarkets — Tesco and Asda — are still seeing sales get battered.

Market research firm Kantar Worldpanel released their monthly survey of Britain’s supermarkets on Tuesday and the data shows that both Tesco and Asda saw a 3.4% drop in sales in the 12 weeks up to December 6.

The drop is mainly due to customers increasingly favouring online shopping, and discounters like Aldi and Lidl.

Both German stores have grown their sales by more than 15% in the past year, and as recently as November, the pair reached a combined share of 10% of the UK grocery market.

Aldi and Lidl sell cheap, no-frills alternatives to name brands and have sparked a damaging price war in the supermarket sector.

The latest Kantar data heaps further misery onto both Tesco and Asda, which have recorded consistent sales declines over the past couple of years and have seen profits plunge.

In fact, most of the UK’s grocery sector is struggling right now. Sales growth in the sector as a whole was just 0.1% in the 12 weeks to December 6, and Sainsburys was the only one of the UK’s biggest grocers to gain any real measure of success over the period, growing sales by 1.2% and marginally increasing its market share.

Kantar’s Head of Retail and Consumer Insight, Fraser McKevitt says this was down to the grocer’s success at the luxury end of the food and drink market, saying in a statement:

Consumers continue to be drawn to the retailer’s ‘Taste the Difference’ range, and with sales of champagne and sparkling wine up by a quarter it seems clear that the grocer is successfully tapping into demand for premium goods.

Kantar’s data also seems to confirm what we already sort of knew: Brits aren’t that bothered about Black Friday anymore.

Sales in UK supermarkets only rose by 4% from the previous Friday on the day of the holiday, despite massive hype from some retailers.

The poor performance of Black Friday sales across the UK supermarket sector wasn’t helped by Asda refusing to take part this year. The company said they were ditching Black Friday in favour of offering customers discounts throughout the holiday period.

As always, Kantar has provided a handy graphic to show the changes in market share held by the supermarkets:

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