Sainsbury has enlisted Jamie Oliver to fight back

Market research group Taylor Nelson Sofres said on Thursday that Sainsbury's share of the grocery market in the 12 weeks to late June had fallen to 16.8% from 17.7% during the same period last year.

Asda's market share, in contrast, climbed to 16.3% from 15.5% the previous year, putting it within a whisker of leapfrogging its larger rival.

Supermarket giant Tesco consolidated its position at the top of the rankings, growing its share of the market from 25.9% to 26.4%.

Grocery league table

Asda has posed a serious threat to Sainsbury's position as the UK's second-biggest grocer since being taken over by US retail giant Wal-Mart in 1999.

Last year, Sainsbury chief executive Sir Peter Davis acknowledged that Asda could overtake his company in the supermarket league, describing his rival's growth rate as "better than anybody's in the industry."

Sainsbury's relegation to third position would mark a major realignment in the UK supermarket sector, currently facing a tougher trading environment as consumer spending slows.

The outcome of the ongoing battle to buy fourth-ranked Safeway, which is being courted by the three top supermarket groups as well as Bradford-based Morrison's and retail entrepreneur Philip Green, could prove decisive.

Competition watchdogs are currently weighing up the impact of a takeover of Safeway by one of the established supermarket groups, with a decision expected in August.