Latest take-home grocery figures from Kantar show supermarket sales fell by 4.4% during the 12 weeks to 15 May as the sector continued to face tough comparisons with last year when some Covid restrictions were still in place. However, sales slipped by only 1.7% over the last month – the market’s best performance since Christmas – as some consumers started to prepare for the Platinum Jubilee weekend.
Meanwhile, the data confirms that grocery inflation is continuing to accelerate. Like-for-like grocery prices rose 7.0% over the past four weeks compared with the same time last year, the highest level of inflation since May 2009 and an increase from 5.9% the month before.
Fraser McKevitt, head of retail and consumer insight at Kantar, commented: “People are really feeling the squeeze at the supermarket tills and they’re having to stretch their budgets further to accommodate rising prices. To put the most recent numbers into context, if you were picking up supplies for a family fry up over the long weekend with toast, eggs, sausages, bacon, and beans it would cost you £6.83 – that’s a significant 40p increase on last year.
“Understandably, only a third of consumers now think of themselves as being in a ‘comfortable’ financial situation. In our recent Kantar Pressure Groups survey, 43% of households described themselves as ‘managing’ while 22% said they were ‘struggling’. Within the growing group of shoppers struggling to make ends meet, the rising price of groceries is of concern to over 9 in ten people, making it the second most important issue behind the spiralling cost of energy bills.”
Despite rising inflation levels, Kantar expects the sector to benefit from the Platinum Jubilee celebrations at the beginning of June. During the Diamond Jubilee in 2012, there was a 10% boost in supermarket sales during the week leading up to the festivities. “While we’re all keen to celebrate in style, shoppers will be carefully considering any unnecessary expense and prices are significantly different from the last Jubilee,” noted McKevitt.
Kantar’s data shows that Lidl was the fastest-growing grocery retailer this period. The discounter’s sales increased by 6.0% in the 12 weeks to 15 May, marginally ahead of Aldi which increased sales by 5.8%. McKevitt commented: “Lidl has hit a new market share high of 6.9%, a 0.7 percentage point increase on this time last year. Aldi also broke records, climbing to a 9.0% share of the market for the first time, an increase of 0.9 percentage points versus 2021.”
Tesco performed ahead of the wider market increasing its share by 0.4 percentage points to 27.4%. This is the seventeenth month in a row that the UK’s largest supermarket has gained share, its longest streak since 2007. Meanwhile, Sainsbury’s, Asda, and Morrisons all lost market share.
NAM Implications:
- Surely no surprise here…
- …except at the fact the share increase has not gone higher and faster, perhaps.
- That said, still early days…
- …and worth keeping in mind that Aldi UK (14% of global Aldi) and Lidl (7/8% of global Lidl) can each afford to undercut the mults at the extent of their global businesses….
- ..for as long as it takes to grow UK market share.
- Meanwhile, a current combined share of 15.9% i.e. second only to Tesco…
- …has to give one pause for thought?
