UK grocer Morrisons shows tentative recovery - Kantar Worldpanel

LONDON, June 30, (Reuters) - Morrisons, Britain's

No. 4 supermarket chain, gained market share over the last three

months, industry data showed on Tuesday, the first time it has

done so since December 2011.

Market researcher Kantar Worldpanel said Morrisons' total

sales rose 0.6 percent over the 12 weeks to June 21, while its

market share edged up 0.1 percentage point to 11.0 percent.

Since March, Morrisons has had a new boss, former Tesco

executive David Potts. He has cut prices and improved

customer service.

Morrisons was the only one of Britain's "big four" grocers

to record a sales rise, Kantar said.

Market leader Tesco (Xetra: 852647 - news) and No. 3 player Sainsbury's

both saw sales fall 1.3 percent, while sales at No. 2 Asda

dropped 3.5 percent.

All of the big four have been cutting prices and stepping up

service in an effort to attract shoppers lost to discount rivals

Aldi and Lidl.

All players are also having to deal with commodity-driven

deflation and a shift in customer habits away from big weekly

shops at large out-of-town stores.

Aldi's sales rose 15.4 percent over the 12 week period,

giving it a record high market share of 5.5 percent. Lidl's

sales increased 9.1 percent, giving it a share of 3.9 percent.

The Kantar data focuses on total sales. On Friday Tesco

posted a better than expected 1.3 percent fall in first-quarter

sales at stores open over a year.

Sales in the overall UK grocery market fell 0.1 percent over

the 12 weeks, Kantar said.

"Sales volumes are up 2 percent compared to a year ago but

are not anticipated to accelerate, even with an improving

economy, as demand for groceries has remained broadly steady

since before the recession," said Fraser McKevitt, Kantar

Worldpanel's head of retail and consumer insight.

Grocery deflation over the 12 weeks was 1.7 percent.

Market share and sales growth (percent)

12 wks to 12 wks to pct change

June 21 2015 June 22 2014 in sales

Tesco 28.6 28.9 -1.3

Asda 16.5 17.1 -3.5

Sainsbury 16.5 16.7 -1.3

Morrison 11.0 10.9 0.6

Co-operative 6.2 6.2 0.0

Waitrose 5.1 5.0 1.2

Aldi 5.5 4.7 15.4

Lidl 3.9 3.6 9.1

Iceland

(Reporting by James Davey; Editing by Mark Potter)