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Growth slowed to 1.4% in the 12 weeks to 24th March, according to Kantar. This makes it the slowest growth rate since March 2018. Inflation edged up from 1.4% to 1.5% causing implied volumes to dip into negative territory. We look at the results in more detail.

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A £1bn investment in price and a cap on fuel profits are part of a package of measures unveiled by the two grocers in final representations to the Competition and Markets Authority ahead of the publication of its final report into their proposed merger.

New commitments to boost merits of deal

The two retailers have made a number of commitments to address concerns raised by the regulator in its provisional findings:

  • Prices would be £1bn lower by the third year after the merger completes. £300m of this would be invested in the first year and the remainder over the following two years as cost savings flow through
  • Sainsbury's would cap its fuel gross profit margin at no more than 3.5 pence per litre for five years. Asda will guarantee its existing price strategy
  • Price commitments would be reviewed independently by a third party and the two retailers will publish performance data each year, holding them to account
  • Sainsbury's would move to pay small suppliers (turnover of <£250k) within 14 days. Asda will continue to pay small suppliers within 14 days in line with existing commitments

Challenges to report findings

Sainsbury's and Asda have also formally set out their criticisms of the CMA's provisional findings. The two retailers said the report contained significant errors, and that these were compounded by the CMA's choice of an unexpectedly low threshold for competition concerns. In a detailed response Sainsbury's and Asda have sought to address 'these economic and legal errors'.

The two retailers have also responded to the Notice of Proposed Remedies by outlining supermarket and petrol forecourt divestments across both brands to satisfy concerns regarding any substantial lessening of competition as a result of the merger.


Sainsbury's Chief Executive, Mike Coupe and Asda Chief Executive, Roger Burnley said:

"We are trying to bring our businesses together so that we can help millions of customers make significant savings on their shopping and their fuel costs, two of their biggest regular outgoings.

"We are committing to reducing prices by £1 billion per year by the third year which would reduce prices by around 10% on everyday items. We are happy to be held to account for delivering on this commitment and to have our performance independently reviewed and to publish this annually.

"We hope that the CMA will properly take account of the evidence we have presented and correct its errors. We have proposed a reasonable yet conservative remedy package and hope the CMA considers this so that we can deliver the cost savings for customers."


For more detail on the merger visit: Sainsbury's and Asda: a merger proposal

The CMA will publish its final report into the merger by April 30th.


IGD Sainsbury's Trade Briefing 2019

27 June, London

Hear from Group CEO, Mike Coupe and the Sainsbury's and Sainsbury's Argos leadership teams, who will provide a business and commercial update on ‘Destination Sainsbury’s’.

Find out more »

The overall growth of the UK grocery market was 1.9% in the 12 weeks up to February 24th, according to the latest data from the Kantar Worldpanel. This was a slight increase of +0.2 percentage points on January, reflecting a nudge upwards in both inflation and volume. 

Brexit: despite growing concern shoppers are not stockpiling

Brexit remains a key issue. Shoppers are worried about its impact but currently only a minority currently say they are modifying their behaviours because of it. Only 3% of ShopperVista shoppers have started stockpiling*. This is a slight increase on the 1% who said they were in August 2018, but the numbers remain small and are not significant enough to affect retailers growth.

Shoppervista subscribers can read more in our Brexit and savvy shopping in 2019 deck.

Valentine's day: boosting February's sales

Valentine's day is a key retail event in the first half of the year, centred around treats following a health focused January. We are increasingly seeing shoppers dine in and meal deals for two continue to be a popular promotional mechanic in February. Shoppers' perceptions are changing regarding discounters and seasonal events. 10% of people brought treats such as chocolate, steak or wine from Aldi in the Valentine's day week.

We explore the three key themes further in our Valentine's 2019 research.

Discounters: still gaining market share

The discounters continue to perform well with both Aldi and Lidl taking market share. Aldi was the only retailer to see double digit sales growth of 10%, a further increase on its 9.1% growth in January.

Lidl's results however were surprisingly disappointing, with growth of 5.4%, compared to 7.3% in January. Retail Analysis subscribers can see the latest format innovation and how Lidl 2.0 is showcasing fresh and appealing to families in our Lidl Dunstable retail execution.

Ocado and M&S: growth in Ocado's sales

Waitrose saw growth, of 1%, which was its highest since August 2018. Watch out for our coverage of its full year results this Thursday. We are continuing to see partnerships reshape the UK retailing landscape with the announcement of the joint venture between Ocado Retail and M&S. After this sales at Ocado rose by 3.4%, whilst it maintained its market share of 1.2%.

Subscribers can read more here in our deck; Ocado Retail and M&S.

Other retailers: mixed results

There were contrasting performances among the larger retailers. Tesco had a positive month, with growth improving to 1.3% from 1.0% in January. The higher growth suggests its trading is no longer being impacted by disruption caused by range changes in the run-up to Christmas.

As in January, Co-op's performance remains strong with growth of 3.6%. This was driven by an increase in footfall of 244,000 over the month.

There were diverging trends for potential merger partners Sainsbury's and Asda. While the sales decline at Sainsbury's worsened to -1% from -0.3% in January. Asda achieved 1% growth continuing an uninterrupted trend since April 2017. Following a highly critical provisional report from the Competition and Mergers Authority both retailers now await a final ruling from the competition watchdog on or before April 30th.Asda. While the sales decline at Sainsbury's worsened to -1% from -0.3% in January. Asda achieved 1% growth continuing an uninterrupted trend since April 2017. Following a highly critical provisional report from the Competition and Mergers Authority both retailers now await a final ruling from the competition watchdog on or before April 30th.

  12 weeks to 25th February 2018 12 weeks to 24th February 2019 Sales growth
Tesco 27.9 27.7 1.3%
Sainsbury's 16.2 15.7 -1.0%
Asda 15.6 15.5 1.0%
Morrisons 10.6 10.5 0.8%
Aldi 7.0 7.6 10.0%
Co-op 5.8 5.9 3.6%
Lidl 5.1 5.2 5.4%
Waitrose 5.2 5.2 1.0%
Iceland 2.2 2.2 1.7%
Ocado 1.2 1.2 3.4%
Other Multiples 1.7 1.8 7.1%
Symbols & Independents 1.7 1.6 -2.3%

*1,000+ shoppers in Jan '19

Look out for our coverage of Morrisons full year results coming in mid March.

Sign-up here to receive our free newsletter that will keep you up-to-date about the latest news and developments from the UK.



In the provisional findings to its investigation, the UK's Competition and Markets Authority has expressed extensive concerns about a lessening of competition that could result from the proposed merger of Britain's second and third largest grocers. It has also issued a notice of possible remedies.

Competition concerns

The CMA believes that combining Sainsbury's and Asda could lead to a 'substantial' lessening of competition at both a national and local level. It says that the proposed deal could lead to a worse experience for in-store and online for shoppers throughout the UK through higher prices, a poorer shopping experience, and reductions in the range and quality of products offered. It also has concerns that fuel prices could rise at a large number of Sainsbury's and Asda forecourts.

Key competition concerns  include:

  • Both parties are present in 629 local areas, covering 45% of Sainsbury's supermarkets and 57% of Asda's
  • Both parties operate convenience stores in 65 local areas covering 7% of Sainsbury's convenience stores and 18% of Asda's
  • Both parties offer online groceries in 290 local areas representing 7% of the delivery areas served by Sainsbury's and 95% of the delivery areas served by Asda
  • Both parties sell fuel in 132 local areas covering 20% of Sainsbury's and 20% of Asda's forecourts

Possible remedies

Two potential remedies have now been put forward: a prohibition of the merger or divestiture of assets to sufficiently lessen its competition concerns.

Blocking the merger would self-evidently resolve the competition issues but the CMA has also cast doubt on divestitures being a feasible solution. This option would entail the disposal of assets to a new market participant or to strengthen an existing competitor, but the CMA thinks that the number of competition concerns identified and their interrelated nature may make this an ineffective remedy. The divested business would need to be a multi-channel national retailer and the CMA is doubtful that a package of assets could be found to provide 'an effective and comprehensive remedy'. It also suggests that it could be difficult to find a suitable single purchaser for the divested business.

Sainsbury's Asda response

Commenting on the CMA’s provisional findings, a spokesperson for Sainsbury’s and Asda said:

"These findings fundamentally misunderstand how people shop in the UK today and the intensity of competition in the grocery market. The CMA has moved the goalposts and its analysis is inconsistent with comparable cases."

"Combining Sainsbury’s and Asda would create significant cost savings, which would allow us to lower prices. Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits."

"We are surprised that the CMA would choose to reject the opportunity to put money directly into customers’ pockets, particularly at this time of economic uncertainty."

"We will be working to understand the rationale behind these findings and will continue to press our case in the coming weeks."

What happens next?

There is now a three week consultation period, ending on March 13th on the provisional findings during which the CMA will accept submissions from interested parties.

The possible remedies document is subject to a two week consultation period, ending on March 6th.

The CMA will publish its final report on or before April 30th.

Full details of the CMA's findings can be found on the CMA website


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Key presentations

As its plans for a merger with Asda face regulatory scrutiny, we explore Sainsbury’s interim results and its current strategic priorities.

This in-depth guide to the United Kingdom explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

An essential summary of trading priorities, latest developments, and other key commercial insights for Sainsbury's.

27 June, London
Hear from Group CEO, Mike Coupe and the Sainsbury's and Sainsbury's Argos leadership teams, who will provide a business and commercial update on ‘Destination Sainsbury’s’.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

If you have a specific business challenge or training requirement we can put together something just for you.

We've grouped all the latest European retail news, store visits, retailer profiles and downloadable presentations together in one place.