British supermarket sales edge higher -Kantar

* Sales down 0.3 pct in 12 weeks to Aug. 14

* Tesco (Xetra: 852647 - news) decline is slowest in six months

* No evidence of Brexit-fuelled inflation

(Adds detail, table)

LONDON, Aug 23 (Reuters) - British grocery sales rose 0.3

percent year on year in the 12 weeks to Aug. 14, with the march

of the German discounters continuing unabated while market

leader Tesco notched its slowest rate of decline in six

months.

The data from market researcher Kantar Worldpanel on Tuesday

showed the fastest overall sales uplift since March, boosted by

warm weather, with promotional sales dropping to their lowest

level since September 2010 as the biggest chains shift towards

more simple pricing models.

"The sun's eventual appearance was a welcome boost to the

market after a delayed start to the summer," said Fraser

McKevitt, Kantar Worldpanel's head of retail and consumer

insight.

Recent sales trends continued, with German discounters Lidl

and Aldi recording growth of 12.2 percent

and 10.4 percent respectively and winning market share.

Tesco was the best performer of Britain's big four

supermarket chains, with sales down 0.4 percent.

"Current trends suggest the retailer may return to (total

sales) growth this year, which would mark the end of a decline

stretching back to March 2015," said McKevitt, highlighting the

success of Tesco's own-label Farm brand launched this year.

Sales at Tesco's closest challenger, Sainsbury (Amsterdam: SJ6.AS - news) 's,

dipped by 0.6 percent, while store closures contributed to a 1.8

percent decline at No. 4 player Morrisons.

Wal-Mart's Asda, Britain's third-biggest supermarket

chain, remained the sector laggard with sales down 5.5 percent.

Kantar Worldpanel said there was no evidence of

Brexit-fuelled inflation causing food prices to rise.

Grocery price inflation remains negative, it said, with a

representative basket of goods 1.3 percent cheaper than it was

last year.

Falling prices reflect the impact of Aldi and Lidl and the

market's competitive response, as well as deflation in some

major categories such as bacon, detergents, snacks and butter.

Official data for July, published last week, showed retail

sales jumping much more than expected, adding to signs that

there has been little immediate hit for consumers from June's

surprise vote to leave the European Union.

Market share and sales (percent)

12 wks to 12 wks to pct change

Aug. 14 2016 Aug. 16 2015 in sales

Tesco 28.1 28.3 -0.4

Sainsbury's 16.1 16.3 -0.6

Asda 15.7 16.6 -5.5

Morrisons 10.6 10.8 -1.8

Co-operative 6.6 6.4 2.8

Aldi 6.2 5.6 10.4

Waitrose 5.1 5.1 1.4

Lidl 4.5 4.1 12.2

Iceland 2.1 2.0 4.3

Source: Kantar Worldpanel

(Reporting by James Davey; Editing by David Goodman)