LONDON J Sainsbury (SBRY.L), Britain's No. 3 supermarket group, posted the highest sales growth of the so called "big four" grocers in the run-up to Christmas and was the only one to grow market share, according to data published on Tuesday.
Market researcher Kantar Worldpanel said Britain's grocery market grew 3.2 percent in the 12 weeks to December 23, with the strongest growth at the discount and premium ends of the market - at Aldi and John Lewis' JLP.UL Waitrose respectively.
Among the "big four" - which also includes market leader Tesco (TSCO.L), No. 2 player Wal-Mart's (WMT.N) Asda and No. 4 Wm Morrison (MRW.L) - Sainsbury's saw sales growth of 3.4 percent, edging up its market share by 0.1 percentage points to 17.1 percent.
Shares in Sainsbury's, which is due to publish a third-quarter trading statement on Wednesday, were up 1.5 percent at 337 pence at 1315 GMT.
Kantar provides data on gross sales, while the focus of retailers' own updates tends to be sales at stores open over a year, or so-called like-for-like sales.
Tesco, fighting back after a dismal Christmas in 2011 led to its first profit warning in 20 years, saw sales growth of 2.9 percent but its market share dipped slightly - by 0.1 percentage points to 30.5 percent, Kantar said.
"This is an improvement on the performance seen throughout 2012, when the average share drop was 0.4 percent, suggesting that festive shoppers gave the retailer a welcome boost in the run up to Christmas," said Kantar director Edward Garner.
Shares in Tesco were up 0.1 percent.
Tesco is due to update on Christmas trading on Thursday. While it is expected to post an improved performance, the outcome will reflect weak comparative numbers.
Asda saw sales growth of 2.2 percent, but its market share slipped 0.2 percentage points to 17.3 percent, Kantar said.
Morrisons, which posted a disappointing trading update on Monday, was the only "big four" grocer to lose sales compared to last year - they fell 0.6 percent and its market share dipped 0.4 percentage points to 12.0 percent.
Waitrose achieved sales growth of 5.4 percent, while budget chains Aldi, Lidl and Iceland posted respective growth rates of 30.1 percent, 10.8 percent and 9.7 percent respectively.
Waitrose said last week it had enjoyed a record festive period.
"Historically, the discounter sector has seen its share dip at Christmas as shoppers treat themselves and trade up, but the all-time record share of 3.2 percent for Aldi is a sign of the times and shows that this is no longer the case," said Garner.
He noted that Aldi and Lidl both benefited from carrying items such as goose, venison and fine wines in their Christmas catalogues this year.
Kantar said its measure of grocery price inflation rose sharply to 4.5 percent for the 12 week period, from 3.5 percent last reported, suggesting that 2013 could bring a renewed period of pressure on household budgets.
Separately on Tuesday an industry survey said underlying UK retail sales rose just 0.3 percent year-on-year in December. That is well below the rate of inflation, suggesting stores sold less in real terms, and increases the chances that the economy contracted in the last three months of 2012.
Many retailers are finding the going tough as consumers, whose spending generates about two thirds of Britain's gross domestic product, fret over job security and a squeeze on incomes.
With the retail market showing minimal growth, retailers are battling to steal market share off each other.
"These results are not a cause for celebration, but not a disaster either," said Helen Dickinson, Director General of the British Retail Consortium, which runs the monthly survey.
She said with consumers facing up to their credit card bills after Christmas, January will likely be a particularly tough month for retailers.
"While consumer confidence remains low, shoppers will tighten their belts and rein in their spending, making life difficult for the average UK retailer," said Dickinson. "There will be no boom and it's likely more than a few will go bust."
With more and more Britons turning to the internet to do their shopping, the retailers that prospered at Christmas were those with well-developed online offers, such as John Lewis, Next (NXT.L) and Debenhams (DEB.L).
UK grocers' market share and change in sales (pct) - Kantar
12 wks toDec 23 2012 12 wks to Dec 25 2011 pct change in sales Tesco 30.5 30.6 2.9 Asda 17.3 17.5 2.2 Sainsbury 17.1 17.0 3.4 Morrison 12.0 12.4 -0.6 Co-operative 6.3 6.5 0.1 Waitrose 4.5 4.4 5.4 Aldi 3.2 2.6 30.1 Lidl 2.8 2.6 10.8 Iceland 2.2 2.1 9.7
(Reporting by James Davey; Editing by Kate Holton and Mark Potter)