Sainsbury’s share price plunges as market share continues to slide

Sainsbury’s (LON:SBRY) share price has tumbled today after Kantar Worldpanel released its latest market share data for the 12 weeks to March 1. According to the industry researcher, German discounters Aldi and Lidl are still gaining market share from Britain’s ‘big four’ supermarket chains, but Tesco (LON:TSCO) and Morrisons (LON:MRW) have both managed to stem market share loss and falling sales, while Sainsbury’s and Asda are losing more ground.
Sales at Sainsbury’s declined 0.5 percent, while its market share fell to 16.8 percent from 17 percent a year ago. Asda leapfrogged Sainsbury’s to reclaim its spot at Britain’s second largest grocer, with a 17 percent share of the market – down from the 17.5 percent for the same period a year ago. However, Asda was the biggest loser of the top chains, with a 2.1 percent fall in sales.

Tesco was the stand-out performer in today’s Kantar report, recording its strongest figures in 18 months, with sales up 1.1 percent. The chain’s market share, which fell throughout 2014, also showed signs of stabilisation, with a drop of just 0.1 percentage points to 28.7 percent, as compared to the same period a year earlier.

“Among the big four supermarkets Tesco has been the standout retailer,” said Fraser McKevitt, head of retail insight at Kantar Worldpanel. “Increasing sales have helped Tesco arrest its falling market share,” he added.
Another good performance amongst the ‘big four’ supermarkets was from Morrisons, whose sales fell by only 0.4 percent, its best result since December 2013. The group’s market share dipped to 11 percent from 11.1 percent a year earlier.

Meanwhile, discounters Aldi and Lidl continued to take market share. Aldi’s sales were up 19.3 percent year-on-year, Kantar said. Although this was the company’s slowest rate of growth since June 2011, it was enough to take it to a new record market share of five percent. Fellow German supermarket Lidl enjoyed sales growth of 13.6 percent, increasing its share to 3.5 percent.
And in a continuing sign of the polarisation of the UK supermarket industry, between the discounters and the upmarket, sales at Waitrose increased by 4.9 percent. Kantar found the premium grocer’s market share had risen to 5.2 percent, from five percent in February 2014.
By 13:34 GMT, Sainsbury’s share price had slumped 2.98 percent to 267.50p. Tesco and Morrisons were also trading lower, with stocks 1.35 percent and 0.77 percent down, respectively.
According to the Financial Times, of the 19 analysts projecting 12 month price targets for Sainsbury’s, the median target is 235.00p, with a high estimate of 330.00p and a low of 155.00p. As of 1 March 2015, the consensus forecast amongst 31 polled investment analysts covering the supermarket group has it that investors should hold their position in the company.
As of 14:51 GMT, Tuesday, 10 March, J Sainsbury plc share price is 267.60p.