Tesco's sales fall but Morrisons shows signs of improvement, Nielsen reports

The poor performance detailed in Nielen market share data came after a profits warning from Tesco this morning after worse than expected trading.

“The cigars won’t be out yet, but it’s a respite from the negative figures that have blighted this year”

Mike Watkins, head of retailer and business insight, Nielsen UK

Asda was again the only one of the big four to increase market share, which improved from 16.1% to 16.3%, according to Nielsen. Sainsbury’s maintained year-on-year market share for the second consecutive 12-week period.

Morrisons’ share fell from 11.3% to 11% and sales dropped 3.3%, an improvement on the last Nielsen update.

Nielsen UK head of retailer and business insight Mike Watkins said: “After a difficult year, there’s an indication in the last few weeks that Morrisons’ sales performance is starting to improve, with newshoppers attracted by some strong promotional offers. It’s early days but if the current momentum continues, Morrisons’ sales growth should return to positive territory before Christmas.”

Across the grocery sector, sales by value were flat in the four weeks ending August 16, providing “evidence of a potential turnaround”, Nielsen said. In the four weeks ending July 19 sales values fell 3%.

Sales volumes were down 0.9% over the four weeks to August 16, versus a 3.5% decline in the previous period.

“The cigars won’t be out yet, but it’s a respite from the negative figures that have blighted this year,” says Watkins. “Whilst July’s warm weather and a continuation of promotional activity helped kick-start sales, the growth challenges for the big four supermarkets remains – weak demand through a ‘shopping only when needed’ mentality among consumers and increased activity at the discounters.”

Watkins added : “Whilst the levels of in-store promotional spend have dipped a little, to 34% of sales, it’s expected to increase again later in the year, as retailers seek to drive pre-Christmas sales.

“Looking ahead, we anticipate sales growths will stay broadly positive for the rest of the year but that the battle for market share will certainly intensify between the big four.”

Percentage share of grocery market spend, by retailer