LONDON: The UK's grocery market grew at the slowest rate in ten years during the three months to mid-August, as supermarket price wars reduced food prices and sales surged at leading discounters.

Figures from industry researcher Kantar Worldpanel show the sector grew 0.8% over this period, but the experience of the leading retailers was hugely different. Market leader Tesco saw its sales decline 4% while its share slipped to 28.2% from 30.2% a year earlier.

Among the rest of the so-called Big Four, Morrisons' sales were down 1.9% and its share dipped to 11%, while sales were up marginally at Sainsbury, by 0.3%, but share was down to 16.4%. Only Asda outperformed the market, growing sales 1.2% and increasing its share to 17.2%.

Among the smaller chains, Waitrose, with a 4.9% share, saw sales up 3.6%. And German discount chains Aldi and Lidl saw sales jump by 29.5% and 18.3% respectively, although their market shares were unchanged on 4.8% and 3.6%.

"Competitive pricing among the big grocers and deflation in the price of staple items such as vegetables, milk and bread has driven inflation down yet again", said Kantar Worldpanel director Edward Garner, in remarks reported by The Grocer. "This naturally impacts on the overall growth of the grocery market," he added.

He also noted the different strategies being employed by Asda and Waitrose to achieve growth, with the former focused on keeping prices on everyday essential items low, the latter running competitive offers on home delivery alongside offers for myWaitrose card users.

The ultra-competitive nature of the sector is set to intensify further as Lidl announced a £20m brand campaign aimed at showing it in a new light, one that UK managing director Ronny Gottschlich described as "less Germanic".

"We want to get customers talking about us and spread the message about our price and quality," he explained, and that meant there would be greater engagement via social media.

The company's marketing and advertising director also told Marketing Week a rewards scheme was in the pipeline that would not be based on points but could involve early access to discounts or exclusive product ranges.

Rival discounter Aldi was recently named the UK's top brand by the YouGov BrandIndex Buzz rankings.

Data sourced from The Grocer; additional content by Warc staff