Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) appear to have lost ground to rivals in the latest grocery market data, although analysts remain broadly positive on the outlook for the UK's biggest supermarket groups.
Figures from Worldpanel by Numerator showed Tesco's sales rose 1.7% in the four weeks to 14 June, while Sainsbury's increased 3.2%.
Tesco's market share fell 20 basis points year-on-year, while Sainsbury gained 11 basis points.
Together, the two chains continued to trail the growth rates achieved by Aldi and Lidl, although the gap narrowed from the previous month.
Citi said Tesco underperformed the wider market, while Sainsbury outperformed, with both retailers continuing to lap tough comparatives from a period boosted by competitor disruption and favourable weather conditions.
However, Shore Capital took a more constructive view of trading conditions. Analyst Clive Black described May and June trade as "sound overall" in the face of more volatile weather patterns.
Black said Tesco and Sainsbury were facing "tough" multi-year comparisons but argued both continued to perform well, with Tesco's recently reported first-quarter sales growth of 2.1% and Sainsbury's 3.5% growth over 12 weeks suggesting the pair were "grinding trade out satisfactorily".
The standout performer remained Marks and Spencer Group PLC (LSE:MKS), whose grocery sales surged 17.2% according to Citi.
Shore Capital said the retailer continued to "perform very strongly" in food, supported by new store space and resilient like-for-like demand.
With food inflation broadly stable at around 3% and no companies interested in a price war, analysts see little reason to alter earnings expectations ahead of Sainsbury's trading update next week.
