Latest data from Kantar shows grocery price inflation increased slightly to 2.0% during the four weeks to 29 September, up from 1.7% last month. Take-home sales at the leading grocers grew by 2.0% over the same period.
The findings show that spending on promoted items continued to rise, climbing by 7.4% in September as households sought to manage their finances. By comparison, full-price sales nudged up by 0.3%. Despite the annual rate of grocery inflation growing, competition between the grocers to attract shoppers has seen prices roll back on some everyday items.
Fraser McKevitt, head of retail and consumer insight at Kantar, commented: “In the fiercely competitive retail sector, the battle for value is on. Supermarkets are doing what they can to keep costs down for consumers, and thanks to their efforts, the prices in some categories are falling. The average price paid for toilet and kitchen roll is 6% lower year-on-year, for example, while dog and cat food are 4% and 3% cheaper respectively.”
With spending budgets still stretched, Kantar noted that people are having to make decisions about what they can afford, with more consumers reporting that they are struggling to balance environmental concerns with their own financial worries. In a recent survey by the research firm, 59% of consumers stated that they are finding it harder to act sustainably, up from 44% last year.
Meanwhile, Tesco achieved its largest share since December 2017. It now controls 28.0% of the market, up from 27.4% a year ago. Sainsbury’s’ sales increased by 5.1%, with its market share improving by 0.4 percentage points to 15.2%. The two chain’s gains appear to be mainly coming from Asda, which has seen its market share fall from 13.7% to 12.6% over the year after a 5.1% fall in sales.
Ocado was the fastest-growing grocer for the eighth consecutive month, with its sales up by 10.0% and market share growing by 0.1 percentage points to 1.8%. The overall online market expanded by 3.5% over the 12 weeks and is now worth £3.7bn, with 22.1% of households shopping online.
Spending through Lidl’s tills climbed by 8.8%, with the discounter adding 0.5 percentage points to its share of the market, bringing it to 8.1%. Aldi’s market share edged down to 9.8%, while Morrisons held steady at 8.6%.
NAM Implications:
- Promo sales: Essentially, retailers are ‘buying’ sales at the expense of the bottom line…
- …and the discounters are still doing well.
- Also the cost-of-living crisis means that climate, sustainability and other issues are becoming secondary.
- Are we headed to a permanent re-prioritisation of sales drivers?
- Meanwhile, with Tesco & Sainsbury’s growing share at the expense Asda…
- …the No.3 mult needs radical attention.
