(Fixes typo in second bullet point from Kantor to Kantar)
* Third-fastest growing grocer behind Aldi and Lidl
* Waitrose market share now 5 pct -Kantar Worldpanel
* Showcasing new store concepts Friday
LONDON, May 2 (Reuters) - British grocer Waitrose lifted sales by 6.5 percent in the first quarter, it said on Friday, outperforming rivals and delivering a record share of an increasingly competitive market.
Britain's grocery market is polarising, with the big four - market leader Tesco, Sainsbury's, Wal-Mart's Asda and Morrisons - being squeezed between German discounters Aldi and Lidl and upmarket players Waitrose and Marks & Spencer.
Employee-owned Waitrose, which is part of the John Lewis Partnership, is growing faster than all but Aldi and Lidl. Its more than 300 stores have given Waitrose a 5 percent market share, researcher Kantar Worldpanel calculates, making it the country's sixth-largest grocer.
Waitrose has attributed its strong performance to new store openings, the success of its "essential" value range and "Brand Price Match" scheme and the popularity of its myWaitrose loyalty card, with card holders accounting for 70 percent of sales made in the quarter to April 26. Free delivery for online shopping has also proved popular, with online sales leaping 79.4 percent.
The grocer, whose worker co-ownership business model has been lauded by British Prime Minister David Cameron, is also trialing bakery and patisserie concepts, juice bars, deli and wine-grazing areas.
All these concepts are being showcased together for the first time in Waitrose's Swindon branch, which opened last month and will on Friday be subject to an analyst and media visit hosted by Managing Director Mark Price.
Waitrose's sales in the week to April 26 were 2.1 percent lower than last year, reflecting a shorter trading week because of the closure of most shops on Easter Sunday.
Sales at the group's John Lewis department stores rose 6.5 percent in the same week, to 72.31 million pounds ($122.16 million). The department stores' sales over the two-week Easter period were its strongest ever, up 3.9 percent, contributing to a 7.8 percent rise for the quarter. ($1 = 0.5919 British Pounds) (Reporting by James Davey and Neil Maidment; Editing by David Goodman)