Grocery sales grow at slowest pace since 2005
BRITAIN’S grocery market is growing at its slowest pace since 2005, with only discounters as well as Waitrose and Sainsbury’s defying the downturn and growing market share.
Figures out yesterday from Kantar Worldpanel showed that grocery sales rose by 2.4 per cent in the 12 weeks to 2 February compared with the same time last year and down from the 2.9 per cent growth reported in the previous three-month period.
Kantar analyst Fraser McKevitt said the slow pace indicated “the bright economic prospects are yet to be seen in the nation’s shopping trolleys”, making it hard for supermarkets to grow sales.
Sainsbury’s was the fastest-growing of the big four supermarkets, increasing sales by 2.7 per cent in the period, which boosted its market share by one percentage point to 17.1 per cent.
However, Tesco and Morrisons both lost market share to rivals, with sales decreasing by 0.4 and 2.5 per cent respectively.
The pair have been the worst hit by rising competition from discounters, which have been aggressively increasing their footprint across the country and have benefited from a shift in consumer shopping patterns.
“Double digit growth helped Aldi and Lidl to gain market share, as shopper habits evolve from using the so called ‘discounters’ to pick up a few items in between shops to them being considered an acceptable place for the weekly shopping trip,” McKevitt said.
Aldi and Lidl together now account for 7.3 per cent of the market, up 1.3 percentage points from last year. Sales in the 12-week period leapt by 32 per cent and by 17.2 per cent at Lidl.
Meanwhile upmarket grocer Waitrose sales were up 5.6 per cent compared with a year ago, helping it to grow its share of the market to 4.9 per cent.
Deutsche Bank analyst Niamh McSherry said: “While UK consumer spending may have picked up in other areas (BRC data indicates UK retail sales grew at 5.4 per cent in January, the strongest pace since March 2010), this is not feeding through to food retail due largely to slowing inflation.”
Grocery inflation fell to its lowest level since July 2010 at 2.1 per cent.