Supermarket giants Tesco and Sainsbury’s will kick off the retail sector’s festive trading updates this week amid concerns of a tough Christmas for the “big four” grocery chains.
Industry survey figures last month suggested discounters would emerge as the clear winners over the period after revealing that half of households shopped at Aldi or Lidl over the three months to December 8 to save money.
Kantar Worldpanel revealed that Aldi boasted a record four per cent share of the market since growing its sales by 30 per cent from a year earlier, while Lidl’s share for the 12 week period was 3.1 per cent thanks to year-on-year growth of 15.5 per cent.
This ate into market shares of the major players, with Tesco’s slice falling to 29.9 per cent from 30.6 per cent a year earlier, while the strongest sales performance of the big four failed to prevent Sainsbury’s from slipping to 16.8 per cent from 17 per cent.
Sainsbury’s, which is first up with its third quarter figures on Wednesday, is expected to break its lengthy record for underlying sales increases, with analysts pencilling in its first decline after 35 quarters of growth in a row.
The market is forecasting like-for-like sales to have slipped by 0.3 per cent in what would mark a sharp reversal of recent buoyant trading. It compares with a two per cent hike in sales for the second quarter and a 0.9 per cent rise for the same period a year earlier.
Morgan Stanley analysts said Sainsbury’s was likely to have been hit by aggressive promotional activity from competitors, slowing food price inflation and a drop in consumer confidence.
Asda’s CEO Andy Clarke said: “This was a very tough December for retailers with price conscious customers leaving it later than ever before to buy presents and do their big Christmas food shop.
