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Price Competition Causes Historic Lows in UK Grocery Market Growth

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Price Competition Causes Historic Lows in UK Grocery Market Growth

Price Competition Causes Historic Lows in UK Grocery Market Growth
June 17
09:56 2014

The latest supermarket share figures from Kantar Worldpanel, for the 12 weeks ending 25 May 2014, show a slowdown in grocery market growth to 1.7% – the lowest level for at least 11 years. Supermarket price competition is prompting another drop in the level of grocery price inflation to 1.2%.

Edward Garner, director at Kantar Worldpanel explains: “Despite the wider market slowing, Lidl achieved a record share of 3.6% this period, accelerating with its highest ever year-on-year growth of 22.7%. Similarly, Aldi has gained 35.9% and retains its record 4.7% share reached last period.”

He adds: “At Waitrose, managing director Mark Price’s tactic of being “everything that the discounters aren’t” seems to have paid off for the retailer. By differentiating its offer, Waitrose has maintained its all-time record share of 5.1% secured last period. Meanwhile, Asda surpassed its rivals with a market-beating growth of 2.4%, lifting market share to 17.1%, compared with 17.0% a year ago. Asda is the only large grocer to grow share year-on-year”.

Tesco, Sainsbury’s and Morrisons have all lost market share since this period last year, while Tesco and Morrisons recorded sales drops of 3.1% and 3.9% respectively. Among the smaller retailers, Iceland’s growth rate has dropped back to average market levels with its share remaining at 2.0%, whereas Farmfoods is mirroring the likes of Aldi and Lidl, growing sales by 27.1%.

Grocery inflation has shown its eighth successive fall and now stands at 1.2% for the 12 week period ending 25 May 2014. This is the lowest level since May 2010 and reflects the impact of Aldi and Lidl and the market’s competitive response.

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