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Major Players Have to Respond to Increasing Pressure in UK Grocery Market

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Major Players Have to Respond to Increasing Pressure in UK Grocery Market

Major Players Have to Respond to Increasing Pressure in UK Grocery Market
October 01
10:27 2013

The latest UK grocery share figures from Kantar Worldpanel for the 12 weeks ending 15 September 2013, show the big four supermarkets under pressure as price becomes less of a differentiator for shoppers and the budget and premium ends of the market continue to grow.

Edward Garner, director at Kantar Worldpanel, comments: “The discounters have continued to perform strongly with year-on-year sales growth of 32.7% for Aldi, another all-time record, and 14.3% for Lidl. At the same time there is no sign of Waitrose running out of steam as it delivers growth of 9.7%. Strong performances by retailers at both ends of the market pose a significant challenge for the big four supermarkets. The combined growth of Lidl, Aldi and Waitrose has taken three market share points out of the grocery market over the past three years and is forcing the major supermarkets to compete for an ever-smaller middle ground.”

He continues: “Price match promotions such as Asda’s ‘Price Guarantee’, Sainsbury’s ‘Brand Match’ and Tesco’s ‘Price Promise’ have meant that price is less of a differentiator and shoppers cannot be convinced to switch outlets based on cost alone. There has been a renewed focus on providing high-quality own label products and this strategy seems to be paying dividends. The upmarket ranges of Tesco Finest and Sainsbury’s Taste the Difference have both registered double digit growth as shoppers respond to the premium offer.”

Sainsbury’s is the only big four grocer to increase its market share over the past year, growing from 16.4% to 16.6% and recording market-beating growth of 5.1%. The other big retailers have all lost market share over the past year, although Asda is ahead of Tesco and Morrisons in terms of its year-on-year sales growth which stands at 2.4%.

Grocery inflation has increased to 4.2% for the 12 week period ending 15 September 2013. This matches the overall grocery market growth of 4.2% and means that the pressure on households to trade down has abated compared with most of 2011 and 2012.

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