Asda in the green corner vs Sainsbury’s in the orange

There’s been no real surprises in the supermarket share data revealed by research Kantar Worldpanel for the past few months, but if Asda continues to slide and Sainsbury’s upward march carries on, Wal-Mart’s UK arm might see itself knocked out of the number two slot.

Tesco (30.8%) and Asda (16.9%) have seen their market share dip for the past few months while Sainsbury’s (16.1%), Morrisons (11.6%) and Waitrose (4.1%) continue to climb upwards.

It’s an ongoing trend, but the fight for market share might start to get interesting in the coming months between Asda, in the Green corner, and Sainsbury’s in the Orange corner.

Sainsbury’s, Morrisons and Waitrose each gained 0.2% market share in the 12 week period to 8 August and with 16.1% of the market, Sainsbury’s is stepping on the heels of its Wal-Mart owned rival.

It’s easy to say that as the market leaders Tesco and Asda have less territory to conquer, whereas the others have more to gain from lower starting points but there is more to it than that.

Tesco still controls 30.8% of the grocery sector according to Kantar Worldpanel, and its share for the past 12 weeks dipped only 0.2%. It would need to drop a hefty chunk of its share to be in danger of loosing its market leading position.

Its closest rival, Asda dropped 0.3% of its market share to 16.9% but is still leagues behind Tesco.

Talking to Ed Garner, a retail analyst at Kantar, about Asda’s most recent results, in which it saw the second quarter of declining sales, it seems to me that that it is its one dimensional focus on low-prices that is holding Asda back.

Asda has been open about losing its focus for a time and becoming too promotional in its approach and has righted its Every Day Low Prices strategy with the launch of the Asda Price Guarantee, but it’s not necessarily beneficial to be seen as a one trick pony.

Consumers are not narrowly focussed on saving every possible penny any more, but are interested in things like food provenance and Fairtrade and so announcing itself as “Britain’s Biggest Discounter” probably didn’t do Asda any favours, according to Garner.

This is creating a drag effect on Asda’s positioning and it’s interesting to see whether Sainsbury’s will overtake Asda before the year’s end.

Through clever positioning and marketing initiatives, Sainsbury’s has got a strong foothold in the value end of the market with its “Feed your family for a fiver” and “Switch & Save” campaigns, and also has a strong positioning in quality food with its Jamie Oliver advertising campaigns and is also the UK’s largest Fairtrade retailer.

Garner puts it succinctly when he says: “Sainsbury’s has struck the balance between value and values.”

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