J SAINSBURY has overtaken Asda to become the UK’s second-largest supermarket, according to the latest figures from ACNeilsen, the market research firm.

The change represents a turnaround in the performance of the two businesses in the past year after a revitalisation of Sainsbury’s under Justin King, its chief executive.

Sainsbury’s was once Britain’s biggest supermarket but was overtaken by Tesco in 1995 and pushed into third place by Asda in 2003.

ACNeilsen’s figures, based on 12 weeks’ sales to March 25, confirm that Sainsbury’s market share rose to 15.3 per cent, against Asda’s 15.2 per cent.

Most industry watchers take note of figures from TNS, a rival to ACNeilsen, which are released today. It is thought unlikely that Sainsbury’s will overtake Asda in TNS’s 12-week figures but that it may do so on a monthly basis as the two were running neck and neck on market share last month. Eleni Nicholas, group managing director of ACNielsen in the UK and Ireland, said: “Sainsbury’s has been working hard to improve performance, with lower prices and improved availability, as recognised by their customers.”

ACNielsen’s panel of shoppers backed up the store’s claim last week that Sainsbury’s had attracted more customers in the past year and that existing customers were visiting the store more frequently.

A spokeswoman for Sainsbury’s said: “It is great news that the performance we reported last week is beginning to show through in market research data. We know our customers are beginning to notice the difference at Sainsbury’s and our priority is on doing the right thing for customers.”

A spokesman for Asda countered: “We’ve been saying for months now that no one should be surprised if Sainsbury’s regained the number two slot. Watch out for more great Asda food offers, more fantastic George fashion and more great general merchandise backed up with even more low prices than before.”

Asda has been criticised in the past few weeks for demanding up-front cash payments from suppliers to fund its latest bout of aggressive price cutting.

David McCarthy, an analyst at Citigroup, said that this suggested the American-owned chain was “struggling”. However, it was too early to judge the overall success of Mr King’s turnaround strategy. “Sainsbury’s has delivered improved like-for-like sales, but needs to deliver total sales growth, lower prices, lower costs, and higher operating margins simultaneously,” Mr McCarthy said.

KING'S FIGHTBACK

• Thousands of price cuts so that everyday items are competitive with rivals
• Brought in Lawrence Christensen, a supply chain expert, to fix problems with warehouses and store systems that had left shelves empty
• Cut head office staff and invested in more store staff, staff training and new tills to improve customer service
• Introduced “try something new today” slogan. Expanded fair trade and organic food ranges

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