Morrisons and Sainsbury's shares drop as Aldi and Lidl surge

Discounters celebrate a 15 per cent rise in sales while the UK's 'big four' grocers continue to shed market share

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(Image credit: Rob Stothard/Getty Images)

Shares in Morrisons and Sainsbury's have dropped more than two per cent as the UK's "big four" grocers came under fresh pressure from discounters Aldi and Lidl.

Of the four largest supermarket groups in the country, only Morrisons did not record a drop in overall sales for the 12 weeks to 26 March, posting a modest 0.3 per cent growth.

However, it and the other main players in the supermarket sector – Tesco, Sainsbury's and Asda - shed market share.

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Morrisons dropped from 10.5 to 10.4 per cent; Tesco sales dipped 0.4 per cent and its share of the market fell to 27.6 per cent; Sainsbury's sales were down 0.7 per cent as its share slipped to 16.1 per cent, and Asda saw sales fall 1.8 per cent and its share drop to 15.7 per cent.

Aldi and Lidl were once more the big gainers, each adding almost 15 per cent to their sales as combined market share raced towards 12 per cent.

Waitrose and Co-operative's sales were also positive, while Iceland posted another healthy jump of 9.8 per cent, taking its market share to 2.2 per cent.

Aldi and Lidl's rapid rises since the financial crisis has piled the pressure on the more established grocers and prompted a fierce price war, hitting margins.

However, the fall in the pound following the vote for Brexit has increased the price of imports and forced price rises across the sector, even though companies are still taking some of the hit themselves.

Researcher Kantar Worldpanel said the price of everyday goods has risen by 2.3 per cent over the past three months, adding £21.31 to the average family's shopping bill.

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