BUDGET supermarket groups are growing sales faster than rivals in Britain’s grocery sector as cash-strapped shoppers battle to preserve their income by trading down, market research showed yesterday.
Kantar Worldpanel said grocery sales rose 5.1 per cent year-on-year in the 12 weeks to 3 October, up from 4.5 per cent in the previous 12 week period.
However, grocery price inflation was 5.7 per cent, suggesting shoppers are actually cutting back.
“The gap between inflation and growth has become a major feature of the grocery market as shoppers trade down to cheaper products and retailers strive to convince consumers they are combating inflation,” Kantar Worldpanel said.
“As a result, those retailers with a low price message are the driving force in the market, with Iceland and Lidl enjoying sales growth of over 10 per cent year-on-year, and Aldi leading the market with 25.1 per cent growth.”
Tesco remains the UK’s largest grocer with a market share of 30.6 per cent. Year-on-year its sales grew by 4.2 per cent.
Among the top four supermarket groups Wm Morrison continued to see the fastest growth with a six per cent lift, taking its market share to 11.6 per cent.
And another budget store, Asda, was up 2.1 per cent to take its total market share to 17.3 per cent.
Waitrose was up by more than nine per cent as the top end continued to perform strongly while the middle endured an ongoing squeeze.
•M&S yesterday launched a French-language website, ten years after closing its operations in France. The company said the move would be followed by the launch of a new flagship store in Paris later in the autumn.
SUPERMARKET PRICE WAR | THE STORY SO FAR
Following news of slowed growth at the UK’s biggest supermarket, Tesco kicked off the latest round in the supermarket price wars with an aggressive “Big Price Drop” campaign with cuts totalling £500m two weeks ago.
Asda, the second largest supermarket quickly reacted to Tesco’s cut-price drive by launching a print advertising campaign, emphasising its pledge to be 10 per cent cheaper on every price, which it launched at the start of the year. Asda has had to work harder to hold onto market share, as budget customers are lured away by the likes of Aldi and Iceland.
Meanwhile Sainsbury’s, the third largest supermarket, stepped up to the latest price warmongering from its rivals with its roll-out of the “Big Price Match”, which gives customers vouchers at the till if the value of their basket is higher than it would have been at a rival supermarket. Morrisons has responded to recent price-cut campaigns with the press ads to launch its latest “Big Pay Day Price Crunch”, which claims to offer more than 1,000 half price offers.