Tesco Gains Market Share For First Time Since 2011

Tesco’s recovery appears to be continuing with latest industry data showing the retailer has increased its share of the UK grocery market for the first time since 2011.

Figures from Kantar Worldpanel for the 12 weeks ending 9 October 2016, show Tesco grew ahead of the overall market with its sales increasing by 1.3%. This was Tesco’s first growth since March 2015 and lifted its market share to 28.2%, up from 28.1% a year earlier.

Kantar Worldpanel said that ready meals and produce were among the fastest growing areas at Tesco, helped by its new ‘Farm Brands’ range and standard own label lines. It added that Tesco had attracted a further 228,000 shoppers through its doors with sales growth strongest among family shoppers, whilst improved trading from its larger supermarket and Extra stores supported this month’s gains.

At Sainsbury’s sales fell by 0.4%, while Morrisons continued to feel the effects of a smaller store portfolio with sales down by 3%. However, the re-launch of its ‘The Best’ range was said to have had a positive impact on its premium own label sales, which increased by 6%. There was a similar picture at Asda where sales were down by 5.2% – its slowest rate of decline for four months – despite a premium own label sales increase of 8%.

Meanwhile, the smaller chains continued to win market share. Iceland increased sales by 6.9% with success across the store, not just in its core frozen lines which this period accounted for only 41% of sales. Kantar Worldpanel said that Iceland’s chilled and ambient grocery sales also grew, as did the chain’s branded soft drink and frozen ready meal lines. Its market share rose by 0.1 percentage points to 2.1% as a result.

The Co-op recorded its 17th consecutive 12 weeks of growth this period with sales are up by 3.1% compared to a year ago, taking share up to 6.5% of the market. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, commented: “Consumers are continuing to buy from Co-op stores more frequently with the average shopper now visiting almost twice a week – an 8% increase. The convenience retailer is responding to challenges from the wider market by focusing on its own label lines, with its re-launched membership card rewarding shoppers who choose Co-op’s own products.”

Waitrose continued to enjoy a sales uplift from its September half price event, with sales growing by 3.5% and contributing to a market share increase of 0.2 percentage points to a total of 5.4%.

At Aldi, sales increased by 11.4% while at Lidl they grew by 8.4%, taking market share up to 6.2% and 4.6% respectively and maintaining the combined market share high of 10.8% which the two retailers achieved last month.

McKevitt concluded: “While the threat of rising prices is on a lot of minds at the moment, we’ve seen the 27th consecutive period of grocery price deflation, albeit at a slower rate. The price of everyday groceries fell by 0.8% compared with a year ago and in contrast to the -1.1% reported last month, with deflation particularly noticeable among pork, crisps and poultry products.”

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