By Ian Walker

LONDON--J. Sainsbury PLC (SBRY.LN) was the clear winner out of the top four supermarkets in the latest 12 weeks, leapfrogging Asda to become the second largest grocer by market share for the first time in over a decade, according to a survey Tuesday.

"Sainsbury's traditionally performs well at Christmas, and its seasonal boost this year means it is now Britain's second largest grocer for the first time since it lost the position in 2003," Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said. However, he said that given the seasonal nature of this share increase, there is a high likelihood Asda will retake the number two spot later in the year.

Sales at Sainsbury fell just 0.7% in the 12 weeks ended Jan. 4, compared with Tesco PLC's (TSCO.LN)'s 1.2%. Sales at both Asda, a subsidiary of Wal-Mart Stores Inc. (WMT), and Wm Morrisons Supermarkets PLC (MRW.LN) fell 1.6% over the period.

Competition between the grocers has been fierce and there is now a gap of just 0.5% sales growth separating the four largest retailers. Such a tightly fought race is unprecedented in records dating back to 1994, according to Kantar.

Sainsbury now has a 16.9% market share, according to Kantar, which monitors the household grocery purchasing habits of 25,000 demographically representative households in the U.K., compared with 17.1% in the 12 weeks ended Jan. 5, 2014. Tesco's market share has fallen to 29.1%, from 29.6%, while Asda's share has fallen to 16.8%, from 17.1%.

Wm Morrisons Supermarkets PLC (MRW.LN) market share fell to 11.3%, from 11.5%.

Outside the top four German discounters Aldi and Lidl saw their market combined share rise to 8.3%, from 7.1%, while up-market retailer Waitrose' market share rose to 5.1%, from 4.8%.

"Shoppers were the big winners at Christmas with cheaper grocery prices encouraging them to spend more at the tills. Like-for-like prices have fallen by 0.9% due to lower commodity costs and an ongoing price war which has continued as the large retailers battle for market share," Mr. McKevitt said.

Write to Ian Walker at ian.walker@wsj.com

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