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UPDATE 1-Britain's Sainsbury's underperforms rivals again in latest data - Kantar

Kantar@ (Adds detail, quote)

LONDON, June 25 (Reuters) - British supermarket chain Sainsbury's underperformed its big four rivals again over the last 12 weeks, in an overall market that posted only modest growth during the wet start to the summer, industry data showed on Tuesday.

In the 12 weeks to June 16 Sainsbury's sales fell 0.6%, market researcher Kantar said.

In contrast sales at market leader Tesco, Asda and No. 4 Morrisons were flat, down 0.1% and down 0.5% respectively.

However, all of the big four lost market share to German-owned discounters Aldi and Lidl, whose sales grew 9.3% and 7.5% respectively.

Sainsbury's, which had its proposed 7.3 billion pound ($9.3 billion) takeover of Walmart owned Asda blocked by the UK competition regulator in April, is due to update on first quarter trading on July 3.

Sainsbury argues that Kantar underestimates its general merchandise market share. This is because since acquiring Argos in 2016 Sainsbury has streamlined general merchandise ranges in its stores in favor of Argos ranges. However, Argos' sales are not captured by Kantar.

Kantar said Sainsbury's had halved the rate of sales decline it registered last month and had attracted more affluent shoppers.

The researcher said overall UK grocery sales were up 1.4%.

"The modest level of current growth is thanks in no small part to the wet start to the summer, with last years heatwave and the run up to the mens FIFA World Cup making 2018 a difficult year to top," said Fraser McKevitt, head of retail and consumer insight at Kantar.

Grocery inflation over the 12 week period was 1.0%. Kantar said prices are rising fastest in markets such as crisps, bottled cola and dog food, while falling in instant coffee, fresh bacon and detergents.

($1 = 0.7828 pounds) (Reporting by James Davey; editing by Kate Holton)