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The Aldi and Lidl price war is killing Sainsbury's

Lianna Brinded   

The Aldi and Lidl price war is killing Sainsbury's
Finance2 min read

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Getty

Kaylie Browning of USA blows smoke out the barrel of her gun during the Women's Trap Final on day eight of the ISSF Shooting World Cup LOCOG Test Event for London 2012 at The Royal Artillery Barracks on April 26, 2012 in London, England.

Sainsbury's just admitted its sales fell for the sixth consecutive quarter.

The British supermarket said in its first quarter results that like-for-like sales, excluding fuel, for the 12 weeks to June 6, fell by 2.1%

In a statement, the grocer's boss highlighted how Sainsbury's continues to be hit badly by the price war between Britain's supermarkets.

"Trading conditions are still being impacted by strong levels of food deflation and a highly competitive pricing backdrop," Sainsbury's CEO Mike Coupe said.

"These pressures, including the effect of our own targeted price investment, have led to a fall in like-for-like sales for the quarter. We outlined in our Strategic Review in November some of the key actions we would be taking to remain competitive in this environment and are encouraged by some of the early trends that we are seeing in our key trading and operational metrics."

Sainsbury's, alongside other major British supermarkets, is battling for market share in the face of aggressive competition from cheap and cheerful newcomers like Aldi and Lidl. Sainsbury's is slashing prices in order to remain competitive, but this means it's collecting less at the tills.

According to Kantar Worldpanel data released last month, Sainsbury's market share has risen just 0.1% over the last three years, rising from 16.4% in 2012 to 16.5% in 2015. This may seem impressive considering Britain's biggest supermarket, Tesco, has lost 2.3% over the same period. But German budget grocers Aldi and Lidl have grown incredibly rapidly over the same period.

Aldi increased its market share to 5.4% this year, from 2.9% in 2012. Lidl's market share rose to 3.9% from 2.8% over the same period.

kantar world panel

Kantar Worldpanel

UK supermarket market share from 2012 to 2015.

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