THE battle of the supermarkets intensified last night after a successful Christmas saw Sainsbury's take its largest share of the market for two years and close the gap on Asda.

According to market research group TNS Superpanel, Sainsbury's controlled 16.2 per cent of the grocery market in the 12 weeks to New Year's Day, compared with 15.9 per cent a year ago.

Its sales growth of six per cent was in stark contrast to Asda, whose share of the market over the festive season failed to match its record high of 17.1 per cent a year ago, falling to 16.7 per cent.

Sainsbury's and Asda still lag behind Tesco, which continued to dominate with a 30.5 per cent share - a figure largely unchanged over the past eight months.

Edward Garner, director of research at TNS, said: "Sainsbury's saw a return of its traditional Christmas uplift, with the highest share for nearly two years.

"It is closing the gap on Asda which, despite also seeing a Christmas uplift, failed to match its record-high share of a year ago.

"In absolute terms, Tesco continues to dominate."

Asda has been growing at a slower rate than the market average and, last month, chief executive Andy Bond pledged to cut prices more aggressively this year to increase competitiveness.

The TNS figures showed that the grocery market as a whole had a buoyant Christmas, with overall sales for the 12-week period up 4.3 per cent on a year ago.