J Sainsbury Plc’s market share fell the most in more than a year as the British grocer’s decision to phase out some promotional offers dented sales.
Sainsbury’s share of U.K. grocery spending fell 0.3 percentage points to 16.2 percent in the 12 weeks through May 22, researcher Kantar Worldpanel said in a report Wednesday, the biggest drop in 15 months. Sales fell 1.2 percent, worse than the 0.4 percent decline in the previous period. Market leader Tesco Plc posted a 1 percent dip.
Some of Sainsbury’s rivals have followed its decision to dial back offers such as “buy-one-get-one-free” in favor of consistently lower prices. Tesco reduced the number of so-called multi-buy promotions by a third in its latest quarter in a bid to restore consumer trust. Sainsbury last month also shuttered its price-comparison program after five years.
The sales decline at Britain’s second-biggest grocer reflects the “short-term result of shifting its promotional emphasis from multi-pack deals to straightforward price cuts,” Edward Garner, director at Kantar Worldpanel, said in the report. Multi-pack deals include two-for-one offers and other shopper-friendly discounts.
Sainsbury’s shares fell 1.2 percent to 265.3 pence at 9:06 a.m. in London, while Tesco rose 0.8 percent to 166.35 pence.
By moving to more consistent everyday prices, the U.K.’s biggest supermarkets are taking a page from discounters Aldi and Lidl. The German retailers’ share of the market grew even as both chains experienced a slowdown in growth in the 12-week period.
The rise of the discounters continued to hurt Wal-Mart Stores Inc.’s Asda, which reported a 5.1 percent drop in sales. Sales at Wm Morrison Supermarkets Plc fell 2.1 percent, partially dragged down by the sale of its loss-making convenience chain last year.
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