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UPDATE 1-Britain's grocery sales fall for first time since June 2016 - Kantar

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LONDON, July 23 (Reuters) - British grocery sales fell by 0.5% in the latest 12 week period, marking the first overall decline in the sector since June 2016, industry data showed on Tuesday.

Market researcher Kantar said the fall reflected the heatwave during the same period last year which boosted demand and made comparisons tough.

It said sales fell year-on-year at all of Britain's big four supermarket groups over the 12 weeks to July 14.

Sales at market leader Tesco fell 2.0%, while at Sainsbury's, Asda and Morrisons they were down 2.3%, 2.0% and 2.6% respectively.

All of the big four lost market share to the German-owned discounters. Aldi's sales were up 6.7% and Lidl's were up 7.0%.

"It was a challenging 12 weeks for all the major grocers, with growth slowing at every supermarket except Ocado," said Fraser McKevitt, head of retail and consumer insight at Kantar.

He said the main factor behind the sales drop-off was shoppers heading out to stores less often.

"Last year people shopped more frequently and closer to home as they topped up the cupboards while enjoying the sunshine and the men's football World Cup. This year households are making one fewer trip, which may not sound like much but is enough to tip the market into decline," said McKevitt.

He also noted that grocery inflation fell marginally to 0.9% in the period. That is good news for consumers but makes it harder for retailers to achieve growth. (Reporting by James Davey; editing by Kate Holton)