Tesco loses ground to Sainsbury in UK food market - Kantar

LONDON (Reuters) - Britain's third-largest grocer, J Sainsbury <SBRY.L>, expanded its market share in the 12 weeks to March 17, while industry leader Tesco <TSCO.L> and No. 4 player Wm Morrison <MRW.L> lost ground, according to monthly data published on Tuesday.

Market researcher Kantar Worldpanel said Sainsbury's sales grew 6.2 percent in the period, giving it a market share of 16.9 percent. Tesco's grew 1.1 percent as the wider market grew 3.9 percent, while Morrison's sales fell 1.0 percent.

Sales at No. 2 grocer Asda <WMT.N> rose 3.8 percent.

Earlier this month, Sainsbury's beat forecasts for fourth-quarter underlying sales, while Morrison's posted its first profit fall in six years.

Kantar also highlighted a continued squeeze on moderately priced supermarket brands, with up-market grocer Waitrose <JLP.UL> and discounter Aldi holding on to record shares of 4.8 percent and 3.3 percent respectively.

"Continued pressure on household budgets has helped Aldi, Lidl and Iceland to record market-beating growth while Waitrose and Sainsbury's have managed to mostly avoid adverse media coverage from the horsemeat scandal," said Kantar analyst Fraser McKevitt.

A horsemeat scandal erupted across Europe's food industry in January when testing in Ireland revealed that some beef products also contained equine DNA.

Tesco said on March 12 it had withdrawn a line of frozen meatloaf after it tested positive for between 2 to 5 percent horsemeat.

Kantar said grocery inflation was 4.2 percent for the 12-week period.

(Reporting by James Davey; Editing by Tom Pfeiffer)