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Thursday, 21 December, 2000, 10:40 GMT
Asda: 'Now number two'
asda walmart supercentre
The first Asda Wal-Mart supercentre store in Bristol
The supermarket giant Asda claims it has now over-taken Sainsbury's to become the UK's second-largest grocer, after Tesco.

This is more to do with Sainsbury's trading badly than Asda trading well...it's a disastrous result for Sainsbury's


Analyst, Schroder Salomon Smith Barney

The company said that official market share figures for December showed that, on the basis of volume of groceries sold, Asda had 15.4% of the market, compared with Sainsbury's 15%.

Industry leader Tesco is still the clear winner with a market share of 23%.

The data by independent retail analysts Taylor Nelson Sofres also showed that, measured by the value of sales, Sainsbury's has a higher market share - at 16.5% for Sainsbury's compared with Asda's 14.5%.

But because an average basket of goods costs more at Sainsbury's, Asda has actually overtaken it in terms of volume.

Market share (by volume)
Tesco 23%
Asda 15.4%
Sainsbury's 15%
Safeway 9.7%
Source: Taylor Nelson Sofres

Sainsbury's was swift to retaliate over the way Asda calculated its figures.

"All the accepted methods of calculating market share continue to show Sainsbury's as number two," Sara Weller, Sainsbury's Director of Marketing, told BBC News Online.

"As usual, Asda is being very selective in the data it has chosen to use in yet another attempt to mislead consumers," she added.

Analysts said that volume figures are rarely used to measure market share.

Mike Godliman, the director of Verdict, an independent retail analysts, said Asda was "trying it on" in arguing it had overtaken Sainsbury's on the basis of one month's trading.

"Asda are not number two, they are number three and will be for some time," he added.


All the accepted methods of calculating market share continue to show Sainsbury's as number two


Sara Weller, Sainsbury's

Asda, owned by the US giant Wal-Mart, has an aggressive discounting strategy.

"Being part of the Wal-Mart family means we can keep cutting prices for all our customers, new and old," Asda's spokesman Paul Mason said.

It plans to open a series of superstores which will sell a range of products as well as groceries.

Supermarket price wars

J Sainsbury's was the UK's number one supermarket until the mid 1990s, when it was overtaken by Tesco.

Tesco fired the first shots in the latest round of the supermarket price war in October, launching a fresh round of price-cuts.

Sainsbury's, which is fighting to regain market share, is currently trying to rebrand itself, with a focus on quality and range.

In November, the group released figures that showed profits had fallen by 16.9% to 300m in the six months to the middle of October.

"This is a disastrous result for Sainsbury's," an analyst at Schroder Salomon Smith Barney said.

Asda has been gradually closing the gap on Sainsbury's - five years ago it was 6.1% behind by volume of sales, but last year it was just 1.4% behind.

Safeway is the UK's fourth-biggest grocer, but it has been capturing an ever-increasing market share.

Last month it announced it had created more than 6,000 jobs in six months and earlier this month it rejoined the FTSE 100 index of leading shares.

Sainsbury's shares were down slightly on Wednesday's close at 401.5p in early trading. They have fallen 8% in the past month.

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See also:

22 Nov 00 | Business
Homebase 'sold by Christmas'
02 Oct 00 | Business
Tesco restarts price war
05 Oct 99 | Your Money
Q&A: Supermarket price wars
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