Sainsbury’s is said to have suffered more than Asda from the late fall of Easter, when it usually benefits from sales of Easter eggs. Photograph: Sean Smith for the Guardian
The grocery market has fallen to its slowest pace of growth in at least 12 years, with all four major supermarket operators losing sales and market share in the first three months of 2014.
Data from market research group Kantar says a late Easter and drop in grocery inflation are combining with the growing power of discounters Aldi and Lidl to pile pressure on Tesco, Sainsbury's, Morrisons and Asda.
Aldi shrugged off the problems of its bigger rivals to achieve a record 35.3% growth in sales in the 12 weeks to the end of March, taking its market share to 4.6%, just a step away from Waitrose's 5%. Lidl continued its rapid gains, with sales up 17.2%.
The discounters are ratcheting up the pressure on the big four, which are also under attack from Waitrose at the top of the market.
In a blow to the incoming chief executive, Mike Coupe, Sainsbury's showed its biggest drop in market share since 2005, as sales fell back by 1.7% – widening the gap between it and closest rival Asda to nearly a percentage point. Asda's sales also fell but it held market share almost steady at 17.4% while Sainsbury's slice of the grocery market slipped to 16.5% from 17% a month ago.
Kantar director Ed Garner said Sainsbury's had suffered more than Asda from the late Easter, usually benefiting more than other stores from sales of British lamb and Easter eggs. The supermarket is also being measured against a strong performance last year when it had a clean sheet during the horsemeat scandal. Garner said: "Sainsbury's figures are a surprise. If they have another period like that then we might start to worry."
Tesco and Morrisons saw sales fall by 3% and 3.8% respectively in the period. Both the Tesco boss, Philip Clarke, and Morrisons chief executive, Dalton Philips, are under pressure to turn around months of falling sales.
Clarke told the City in February he had accelerated his turnaround plan for Tesco with more store refurbishments in prospect and a planned £200m in price cuts on staple groceries. Morrisons has pledged £1bn in price cuts and food quality investments over the next three years as it fights back against Aldi and Lidl.
Clarke also appears to be responding to the latest round of criticism with an executive clearout. Chief financial officer Laurie McIlwee resigned last week amid rumours of a fall out with Clarke and on Tuesday it was reported that the head of the Clubcard loyalty scheme had departed.
Online
The UK's online retailers are the latest to suffer from a wave of cynicism about tech stocks sweeping around the globe. Online takeaway ordering service Just Eat yesterday fell 5.3% to 250p – its first full day of trading on the stock market, after it launched at 260p.
Shares in AO World, the recently listed electrical appliances retailer, sank 5%, while online grocer Ocado's stock sank 6% and fashion retailer Boohoo was down 4.3%. Only Boohoo's bigger rival Asos escaped the carnage, with shares up just 0.8% – although its shares have dropped a third in the past month.
Analysts said the rout, which reflects similar slumps on the US Nasdaq exchange and in Europe over recent days, was the result of investor moves away from riskier stocks where the share price is way ahead of the sales and profits achieved. Events in Ukraine, concerns about the slowing of quantitative easing in the US and reassessment of the risks and rewards from online retailing have all fed a flight to more stable stocks.
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