Tesco Sees Best Performance In Over Two Years Whilst Asda Continues To Struggle

The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 11 September 2016 show Tesco continuing its recovery whilst sales at Asda fell heavily despite recent initiatives aimed at halting the decline.

Tesco’s summer ‘Drinks Festival’ is said to have helped it grow its alcohol sales faster than any other major category, and while the retailer’s sales have not yet returned to growth, a decline of 0.2% year-on-year is its best performance since March 2014. Having held back the group’s performance in recent years, Kantar Worldpanel said Tesco’s Extra and larger format stores delivered a positive contribution. However, the chain’s overall market share fell back by 0.1 percentage points and Tesco now accounts for 28.1% of the grocery market.

Meanwhile, the difficult task facing Asda’s new Chief Executive Sean Clarke was highlighted with the chain’s sales falling 5.4% and its market share slipping 1% to 15.7%. Earlier this month, Clarke has kicked off his attempts to halt the chain’s falling sales, launching thousands of price cuts and a new marketing campaign highlighting the quality of its own label lines.

At Sainsbury’s, sales fell by 1.4% with overall prices at the chain down as it reduced the levels of promotional activity as part of its shift to a simpler pricing strategy. Meanwhile, after posting robust like-for-like growth in last week’s trading update, Morrisons’ market share fell by 0.3 percentage points to 10.4%, reflecting its reduced store portfolio. Kantar Worldpanel said that online sales are becoming more important for Morrisons, with shopper numbers up by 45% on last year.

Sales at Waitrose increased by 3.4% on last year, helping the retailer reach a new record market share of 5.3%. It’s ‘Half Price Event’ is said to have boosted performance across much of the store – particularly in household and alcohol. However, Kantar Worldpanel said the increase in sales came at a cost, with Waitrose’s proportion of promotional sales reaching a higher level than some of the traditionally more promotion-focused ‘big four’ retailers.

The Co-op continued to outperform the market with sales growth of 3.1%, primarily through its own label lines. The convenience retailer was another to post strong alcohol sales, though its produce lines were its fastest growing category, helping market share increase to 6.6%.

Iceland’s recent run of success continued as sales grew by 6.3% compared with a year ago, with its core ice cream and frozen fish categories particularly over-performing.

Meanwhile, Aldi and Lidl continued their unrelenting growth – not only are both continuing to expand their store estates but existing customers are visiting more frequently and upping their basket size. Kantar Worldpanel said the two discounters are helping drive the industry-wide growth in premium own-label lines, with marketing campaigns moving away from showcasing only price to a focus on quality – collectively, premium own label grew by 29.5% in the discounters during this period.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, commented: “Shoppers now spend an average of £19.24 when visiting the discount retailers and at a time of falling prices this increase of 4% is not to be sniffed at.”

Lidl reached a market share high of 4.6% this period having grown by 9.5%, while Aldi increased sales by 11.6%.

Despite continued deflation in the sector of 1.1%, overall supermarket sales edged up 0.3%, boosted by demand for alcohol as shoppers celebrated Britain’s summer of sporting success. McKevitt said: “While overall sales growth has been slow, consumers have been keen to celebrate Britain’s Olympic and Paralympic golden summer, boosting alcohol sales by 8.5% in the past four weeks. Sparkling wines including Prosecco and Champagne led the way with growth of 36.0% as promotional events across a number of retailers successfully tapped into the nation’s celebratory mood.”


NAM Implications:
  • Where at: This latest Kantar research clearly demonstrates the fundament shifts taking place in UK retail, with little real overall improvement for the mults, despite unprecedented price wars
  • Where headed: Given the relative rates of growth of the key players in an economy that will continue to flat-line for five years, branded suppliers especially are faced with the prospect of private/surrogate label growth at the expense of brands
  • How it affects you: Dilution of your access to consumers via the mults
  • Action: Crucial to find ways of working with the discounters and pound shops, whilst optimising any available online opportunities, including Amazon