Sainsbury’s has fallen into third place in the UK supermarkets league, behind Asda, as its sales declined at a far faster rate than any of its major rivals.

According to the latest figures from Kantar, Sainsbury’s sales fell 1.8% in the 12 weeks to the 24 March, taking its market share to 15.3%, 0.5 percentage points lower than a year before.

It was the worst performer, not only among the big four supermarkets, but also behind smaller rivals including Iceland and Co-op. Morrisons was the only other supermarket chain to record a sales drop in the period, down 0.1% year on year.

Sainsbury’s woes led to Asda reclaiming its place as the second biggest UK supermarket chain, with sales up 0.1% year on year, taking its market share to 15.4%. Kantar said one reason for Sainsbury’s sales slide was that an increasing proportion of its non-food sales now go through Argos, which is not included in the figures. Sainsbury’s overtook Asda in October 2015.

The two supermarket groups are struggling to persuade the UK competition watchdog to allow their proposed £7bn merger to go ahead.

Last month, Sainsbury’s and Asda offered to sell off up to 150 supermarkets and 38 petrol stations to push the deal through.

However, the proposed sales are equivalent to only about half the number that the Competition and Markets Authority has indicated could be required in order to gain permission for the merger. It is also considering blocking the merger entirely or insisting on the sale of one of the supermarket brand names.

Analysts believe the tie-up between the UK’s second and third largest supermarket chains is doomed after the CMA warned in February that the deal threatened to push up prices and reduce the choice and quality of products on sale.

The Kantar figures continue to show the rise of the discount players, with Aldi recording the biggest sales boost of any supermarket chain at 10.6% year on year across the period, pushing it to a record market share of 8%. Lidl had the second biggest sales increase, up 5.8% year on year.

“Thirteen million households visited Aldi at least once in the past 12 weeks – now more than those shopping at Morrisons,” said Fraser McKevitt, consumer head of retail and consumer insight at Kantar.

Morrisons remains larger than Aldi by sales with a market share of 10.3%, making it the fourth biggest UK supermarket chain.