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Sainsbury Warns of Asda 'Threat' in the U.K.

LONDON - J Sainsbury's chief executive on Friday warned of the growing competitive threat to the nation's two largest food retailers from accelerating sales at Asda, the Wal-Mart-owned chain, the Financial Times reports.

Sir Peter Davis said Asda was "breathing down our necks" as he reported underlying like-for-like sales growth of 4.2 percent in the 12 weeks to March 30.

Asda's estimated market share has grown to 10.6 percent, compared with Sainsbury's 11.7 percent and Tesco's 16.7 percent, according to the Financial Times.

"The rate of increase is greater at Tesco, but the rate of increase is much greater at Asda than at Tesco," Sir Peter said, adding that Tesco had been comparing its growth with Sainsbury rather than Asda.

Monthly like-for-like sales at Asda have accelerated since last September from about 8 percent to about 12 percent, analysts said. Much of this increase reflects strong growth in non-food.

Shaws, Sainsbury's US supermarket operation, reported a 3.1 percent rise in like-for-like sales, up from 1.6 percent in the third quarter.
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