Retail News Update

Asda has overtaken its rival Sainsbury’s for the first time to become the UK’s second biggest online grocer.

The Wal-Mart-owned supermarket chain grew its home shopping grocery sales by 71.8 per cent for the 12 weeks to 15 June, compared with the same period last year, according to TNS Worldpanel figures seen exclusively by The Independent.

The revelation will ratchet up the pressure on Sainsbury’s in the burgeoning home shopping market, although both supermarkets’ online grocery sales are dwarfed by market leader Tesco.

It is understood that Sainsbury’s grew online sales by just 17.3 per cent over the same 12-week period to 15 June.

Asda first overtook Sainsbury’s in May and has remained marginally ahead of its rival since then. Food and drink account for the vast majority of the TNS Worldpanel home shopping sales, but these figures also include traditional non-food grocery items, such as cleaning products.

Asda declined to comment on any comparison with Sainsbury’s but confirmed its online grocery sales had grown by more than 70 per cent for the 12 weeks to 15 June. Asda’s chief executive, Andy Bond, admitted last year that it had been slow to exploit the full potential of grocery home shopping, but since then it has been rapidly expanding its coverage in the UK. For the seven days to 15 June, Asda grew home shopping sales by 56 per cent, while Sainsbury’s was thought to have increased sales by 8.3 per cent.

Sainsbury’s declined to comment on the figures but said that its total online grocery sales over the past year – as opposed to a 7-day or 12-week period – were ahead of Asda’s. TNS World-panel refused to comment.

Sainsbury’s has suffered intermittent technical problems since mid-June with its online grocery site, which have now been fixed, but the TNS figures relate to the period before they occurred.

The online shopping battle is set to intensify in the autumn, when Asda relaunches its website on a new platform. A key goal is to ramp up online sales of non-food products, but ultimately Asda wants to offer customers a fully integrated grocery and non-food shopping experience. Sainsbury’s is also gearing up for a major online non-food push, including clothing.

Asda, Sainsbury’s and Tesco operate a pick-from-store model for grocery home shopping, while online grocer Ocado, which delivers Waitrose’s products, uses a hub-and-spoke model from an automated central warehouse. Tesco has also piloted a dotcom grocery store in Croydon, and plans to open another this year.

In the wider grocery sector, Tesco had a 31.3 per cent share of the market, Asda was 16.9 per cent and Sainsbury’s had 15.9 per cent for the 12 weeks to 13 July 2008.