Britain's grocery sales fall for first time since June 2016 - Kantar

LONDON (Reuters) - British grocery sales fell by 0.5% in the latest 12 week period in their first decline since June 2016, industry data showed on Tuesday, sending shares across the sector lower.

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Market researcher Kantar said the sales dip reflected a heatwave a year earlier which had boosted demand.

It expects the market to return to growth once the comparative highs of the summer of 2018 pass.

Sales fell year on year at all of Britain’s big four supermarket groups over the 12-week to July 14 period, Kantar said.

Sales at market leader Tesco TSCO.L declined 2.0%, while at Sainsbury's SBRY.L, Asda WMT.N and Morrisons MRW.L they were down 2.3%, 2.0% and 2.6%, respectively.

Shares in Tesco were down 2.4% at 0813 GMT, Sainsbury’s was down 1.2% and Morrisons was down 0.8%.

All of the big four lost market share to German-owned discounters Aldi and Lidl. Aldi’s sales were up 6.7% and Lidl’s were up 7.0%.

"It was a challenging 12 weeks for all the major grocers, with growth slowing at every supermarket except Ocado OCDO.L," said Fraser McKevitt, head of retail and consumer insight at Kantar.

“Last year people shopped more frequently and closer to home as they topped up the cupboards while enjoying the sunshine and the men’s football World Cup,” he said

“This year households are making one fewer trip, which may not sound like much but is enough to tip the market into decline.”

Kantar said consumers spent 75 million pounds less on alcohol this year compared to last. Soft drinks sales fell by 56 million pounds and ice cream by 55 million pounds.

It noted that grocery inflation fell marginally to 0.9% in the period. That is good news for consumers but makes it harder for retailers to achieve growth.

Kantar said prices are rising fastest in markets such as crisps, canned fish and fruit squash, while falling in instant coffee, detergents and fresh bacon.

Reporting by James Davey; editing by Kate Holton and Jason Neely