UK: Tesco Loses Market Share Amid ‘Intense’ Price Competition – Kantar Worldpanel

Latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 25 December 2011 show the UK grocery market growing at 4.8% per year. This growth rate remains below the 5.9% food inflation rate, reflecting what Kantar describes as the “intense and ongoing price competition between retailers.”

Edward Garner, Director at Kantar said: “We continue to see a price war as the big four battle for market share. Tesco’s Big Price Drop has had an aggressive response from its competitors and put pressure on its share, which has slipped from 30.5% a year ago to 30.1%. In contrast, Asda has seen a strong year-on-year performance with its share up from 16.8% to 17.2%. This is in part thanks to the conversion of Netto stores which it acquired earlier in the year.

“Sainsbury’s has also enjoyed a positive year-end performance with its Brand Price Match helping the retailer to grow its share to 16.7%. This is the highest share we have reported for Sainsbury’s since March 2003. Morrisons also achieved growth just ahead of the market and held share as a result.”

Elsewhere, Kantar said that the ‘Two Nations’ divide remains a prevalent feature of the grocery market with Iceland, Aldi, Lidl and Waitrose all performing strongly. The performance of the discounters was bolstered by some Netto shoppers turning to their stores.

Garner added: “Behind these topline numbers, there is now strong evidence that households are shopping around more. Nearly all retailers can claim to have more shoppers, who are making more trips than last year. However, basket sizes are now smaller – a classic response to tight household budgets.”

Kantar Worldpanel - Update on Inflation
Grocery inflation stands at 5.9%* for the 12 week period ending 25 December 2011. This is a decrease on the 6.2% we reported last period.

*This figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers. It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods – shoppers are likely to achieve a lower personal inflation rate if they trade down or seek out more offers.

These findings are based on Kantar Worldpanel data for the 12 weeks to 25 December 2011. Kantar Worldpanel monitors the household grocery purchasing habits of 25,000 demographically representative households in Great Britain. All data discussed in the above announcement is based on the value of items being bought by these consumers.

www.kantarworldpanel.com

Published:  10 January 2012