UK: Supermarket Wars Heat Up

Data released yesterday shows that Asda, Britain's No.2 grocer, is gaining market share as cash-strapped shoppers hunt for bargains. Meanwhile market leader Tesco's growth is lagging despite efforts to take on discounters.

Asda's sales grew by 8.7 percent in the 12 weeks to Nov. 1, lifting its market share to 15.6 percent from 14.9 percent in the same period last year.

Sales growth at Tesco, Britain's biggest retailer, lagged the market at 4 percent, despite its launch in September of a new range of low cost products. The move hasn't picked up many new customers, it has merely encouraged existing Tesco customers to trade down within the store, analysts say.

Sales growth at Wm Morrison, Britain's fourth-biggest supermarket group, was 9.1 percent in the 12-week period, but slipped below Asda in the latest four weeks.

Number three J. Sainsbury saw growth of 3.4 percent, while upmarket groups Waitrose and Marks & Spencer struggled with growth of 0.3 percent and a fall of 0.7 percent respectively.