Asda and Sainsbury’s have increased their share of the UK grocery market, according to the latest data from Kantar Wordpanel, which includes the run-up to Christmas.

In what Kantar described as a “price war”, Asda, the UK’s second-largest retailer, saw its sales increase 7.3% year-on-year for the 12 weeks to 26 December. The sales jump meant Asda’s share of the market grew from 16.8% to 17.2%

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Asda’s sales would have been boosted by the acquisition of Netto’s UK stores in early 2011 but Kantar said the retailer “performed well”.

Sainsbury’s, the third-largest grocer in the UK, enjoyed its highest market share since March 2003, Kantar said. The retailer’s sales rose 5.5%, taking its share of the market from 16.6% to 16.7%.

The market as a whole grew by 4.8% year-on-year, below food inflation at 5.9%, Kantar said.

“We continue to see a price war as the big four battle for market share,” Kantar Worldpanel director Ed Garner said today (10 January). “Asda has seen a strong year-on-year performance with its share up from 16.8% to 17.2%. This is in part thanks to the conversion of Netto stores which it acquired earlier in the year.

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“Sainsbury’s has also enjoyed a positive year-end performance with its Brand Price Match helping the retailer to grow its share to 16.7%. This is the highest share we have reported for Sainsbury’s since March 2003.”

Tesco, the UK’s largest grocer, increased its sales by 3.3% but its share of the market fell from 30.5% to 30.1%. Garner said Tesco had endured an “aggressive response” from its competitors to its Big Price Drop promotional campaign.

Morrisons, which yesterday reported a 2.9% increase in sales for the six weeks to 1 January, saw its sales climb 5.1% during the 12-week period monitored by Kantar. Its market share held steady at 12.2%.

Reflecting on the market as a whole, Garner argued consumers were becoming less loyal to a particular retailer – leading to all retailers seeing an increasing in traffic – but were buying less.

“Behind these topline numbers, there is now strong evidence that households are shopping around more. Nearly all retailers can claim to have more shoppers, who are making more trips than last year,” Garner said. “However, basket sizes are now smaller – a classic response to tight household budgets.”

He also noted that the notion of “two nations” in the UK grocery market had continued, with Iceland Foods, Aldi and Lidl and Waitrose “all performing strongly”.