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Major British Grocers Forced to Change Strategy

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Major British Grocers Forced to Change Strategy

Major British Grocers Forced to Change Strategy
May 08
10:43 2014

The latest share figures from Kantar Worldpanel, published for the 12 weeks ending 27 April 2014, show British grocery market growth at just 1.9% – the lowest level for at least 11 years. This low growth has been caused by intensifying price competition among the supermarkets and a resulting drop in price inflation.

Edward Garner, director at Kantar Worldpanel, explains: “There are clear signs that the major supermarkets are reviewing their strategies in the face of increasing competition. We’re now seeing the big four moving away from ‘here today, gone tomorrow’ promotions and toward everyday low prices – with Tesco, Morrisons and Asda all announcing price cuts this month.”

He continues: “The proportion of sales on promotion currently stands at 45% among the big four. By contrast, the figure at Aldi is just 3%. Tesco now states ‘Prices down and staying down’, Asda features ‘Price lock’, Morrisons introduced ‘I’m Cheaper – everyday low prices’ and the Co-operative has adopted ‘Fair and Square’ pricing in a move to give shoppers lower everyday prices with greater transparency. Lower prices across the board is great for shoppers, but has driven down market growth to its lowest level in 11 years.”

Waitrose, Aldi and Lidl all achieved new record shares this period with 5.1%, 4.7% and 3.5% respectively. Aldi’s sales growth rate of 36.1% is an all-time record for the retailer and Lidl’s 20.9% growth is its highest since August 2004.

Among the big four, Asda has proved the most resilient, holding its 17.3% market share and narrowly beating the market with 2.0% year-on-year growth.  Tesco, Sainsbury’s and Morrisons have all suffered declines in their market share while Tesco and Morrisons have recorded a fall in actual sales.

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