Latest grocery industry data from Kantar shows year-on-year supermarket sales returned to growth during the 12 weeks to 8 September, although the Big Four chains all saw falls in sales and market share as the discounters and online rivals charged ahead.
While overall sales grew by 0.5%, driven by grocery inflation of 1%, volume sales remained flat. Fraser McKevitt, head of retail and consumer insight at Kantar, commented: “As we move closer to 31 October, it seems talk about stockpiling might be just that because we’re not seeing any evidence of it at the moment. In fact, households bought 0.9% fewer items during the past 12 weeks than they did last year.”
All summer, retailers have faced tough comparisons with last year’s heatwave and disappointing weather which has made it hard for them match the highs of 2018. However, Kantar highlighted that the sector did benefit from the hot August Bank Holiday with grocery shoppers spending £1.3bn from Friday through to Sunday, which was marginally more than last year.
Lidl reached a new record high market share with it crossing the 6% line for the first time. An additional 618,000 shoppers visited the retailer compared with last year, helped by store openings, refurbishments and its newspaper voucher deals. McKevitt said: “Having moved through the 5% barrier as recently as May 2017, the retailer has taken just over two years to add another percentage point to its market share – one that’s worth £1.2bn annually.”
Meanwhile, Aldi’s sales increased by 6.3% with its strongest growth coming in the south of England where sales rose by nearly 9%. McKevitt commented: “The discounter’s lowest market share continues to be in London, where it only accounts for 3.3% of grocery sales, so it’s unsurprising that this week it announced plans to more than double its number of stores within the M25.”
The other bricks & mortar retailer in growth this period was the Co-op, increasing its sales by 1.8%. One third of British households made a trip to the convenience retailer during the past three months, visiting the store nearly twice a week on average.
Ocado was again the fastest growing grocery retailer with its sales up by 12.7%, boosted by products such as ice cream, cheese and sparkling wine which all experienced growth in excess of 20%.
Meanwhile, it was Sainsbury’s strongest period since October 2018 and it was the best performing of the Big Four chains for the second month in a row, despite a marginal sales decline of 0.1%. Sainsbury’s increased its rate of sales on promotion faster than any other retailer with its Price Lockdown strategy lowering prices on meat and fresh produce in particular.
Sales at Asda and Tesco continued to slide, down by 1.0% and 1.4% respectively. McKevitt commented: “There were bright spots for Tesco including sales of free-from products, which were up 11%, and its own value lines like Redmere Farms and Creamfields as sales of these ranges totalled over a third of a billion pounds.”
Morrisons was again the worst performing amongst the Big Four with its market share dipping below double digits at 9.9% after sales fell by 2.0%. Waitrose sales declined by 1.3% and Iceland by 2.0%, taking their market shares to 5.0% and 2.1% respectively.
NAM Implications:
- Difficult to accept that the Big 4 are no longer growing…
- …and will gradually lose share (currently 67.2%) to the discounters and other formats, from now on…
- Best for suppliers to optimise alternative formats and banners…
- …both organisationally and economically.
