LONDON, Nov 11 (Reuters) - Asda, Britain's No.2 grocer, is gaining market share as cash-strapped shoppers respond to its reputation for low prices, while market leader Tesco's growth is lagging peers despite efforts to take on discounters.
Data from market researcher Nielsen show Asda, owned by U.S. retail giant Wal-Mart, grew sales by 8.7 percent in the 12 weeks to Nov. 1, lifting its market share to 15.6 percent from 14.9 percent in the same period last year.
In the last four weeks, Asda's market share reached 15.8 percent, its highest level outside of Christmas 2007, Nielsen said in a statement on Tuesday.
The value of sales by major supermarkets grew 5.1 percent over the 12 weeks, down from 5.4 percent the previous year. The total UK grocery market grew 3.1 percent, Nielsen said.
"Despite food inflation being more than double this time last year, the topline growths at the Multiples (major supermarket groups) are slowing when they should in fact be accelerating," Mike Watkins, senior manager retailer services at Nielsen, said in a statement.
"It's looking like a tough Christmas ahead for food retailers."
Sales growth at Tesco, Britain's biggest retailer, lagged the market at 4 percent, despite its launch in September of a new range of low cost products and a marketing campaign under the banner "Britain's Biggest Discounter."
Nielsen, which said last month Tesco had attracted 660,000 more shoppers partly in response to the new range, said the extra customers had been retained.
"But the impact has also been to encourage Tesco shoppers to trade down within Tesco and this has resulted in lower Total Till growths than Asda," Watkins said.
"We anticipate that ongoing there will be a trade off for Tesco, with lower value sales being translated into improved unit sales and so improved cash returns as the new Discount brands take a growing share of category sales."
Sales growth at Wm Morrison, Britain's fourth-biggest supermarket group, was 9.1 percent in the 12-week period, but slipped below Asda in the latest four weeks.
Number three J. Sainsbury saw growth of 3.4 percent, while upmarket groups Waitrose and Marks & Spencer struggled with growth of 0.3 percent and a fall of 0.7 percent respectively.
% Share of total grocery market spend
12 wks to 12 wks to Value sales
01/11/08 03/11/07 percent change yr/yr Tesco 28.1 28.0 4.0 Asda 15.6 14.9 8.7 Sainsbury 14.1 14.1 3.4 Morrison 10.3 9.8 9.1 Co-Op 6.1 6.2 1.6 Waitrose 3.3 3.4 0.3 M&S 3.6 3.8 -0.7 Somerfield 3.4 3.5 0.3 Iceland 1.8 1.6 13.7
(Reporting by Mark Potter; editing by Elaine Hardcastle)