Customers are deserting J Sainsbury for its leading rivals for the first time in the recession, it was revealed yesterday. More than £11 million of spending was switched directly to its main competitors in the 12 weeks to November, according to confidential industry “switching” data.

Sainsbury’s, led by Justin King, gained a mere net £700,000 from Asda and smaller gains against Netto and Farm Foods, according to TNS Worldpanel, the market researcher.

About £2 million of spending was switched to Tesco, suggesting that its introduction of double points on its Clubcard loyalty scheme had lured customers from Sainsbury’s. Waitrose, whose sales have grown rapidly since it introduced a value range in March, took £4 million of spending from Sainsbury’s. Aldi, the German discounter, took a further £2.5 million. The figures suggest that Sainsbury’s faces a battle on two fronts, as it is losing spending to the upmarket Waitrose and to downmarket rivals. Tesco faced a similar predicament last year before it introduced a range of discount goods to see off the likes of Aldi and Lidl.

The findings may cast doubt on Sainsbury’s ambitious expansion plans by undermining its claim that it can compete with traditionally more value-focused retailers, such as Tesco and Asda.

Mr King, who has been linked with the chief executive’s job at Marks & Spencer, earned a pay and bonus package of £6.5 million in May for reversing the supermarket group’s fortunes. However, some industry insiders view the recent performance of Sainsbury’s as evidence that the company will struggle, with Tesco and Asda promising a Christmas price war.

Sir Terry Leahy, chief executive of Tesco, said in September that the tide had turned and that his supermarket was growing faster than its rivals — a claim derided at the time by Mr King as an unsubstantiated “throwaway” remark.

Mr King adopted a less confrontational tone last year, saying: “We don’t need anyone else to fail for us to succeed.”

The leading grocers have been helped by the performance of Somerfield, which has been losing sales because many of its stores were sold after its acquisition by the Co-Operative Group.

A Sainsbury’s spokesman said: “We continue to grow market share and we are now serving over 18.5 million customers each week, up 800,000 on this time last year. We also have an excellent growth opportunity through our expansion plans.”

Until recently, Sainsbury’s had confounded critics, who said that its relatively upmarket position would leave it exposed to a recession. The company said that it had improved customers’ perception on its prices by introducing a “switch and save” campaign, encouraging shoppers to ditch brands in favour of cheaper own-label goods.

It has also tapped investors for £432 million to accelerate its expansion programme, in an effort to boost both its non-food offering and its representation in the North of England and Scotland. The company said last week that it aimed to double the customer base of its larger stores within five years by expanding its non-food range and opening large supermarkets.

The TNS data suggests that Tesco's drive to become Britain’s biggest discounter has succeeded, as it has taken £7 million of spending from Aldi. It has lost customers to Waitrose and Morrisons.

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