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UK Grocery Market – Some Christmas Assumptions are Challenged

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UK Grocery Market – Some Christmas Assumptions are Challenged

UK Grocery Market – Some Christmas Assumptions are Challenged
January 10
12:30 2013

The latest grocery share figures from Kantar Worldpanel UK for the 12 weeks ending 23 December, show the grocery market growing at 3.2% – the same as last period – with the strongest growth recorded at the discount and premium ends of the market.

Edward Garner, director at Kantar Worldpanel, comments: “Among the big four supermarkets Sainsbury’s is, once again, the only retailer to increase its share compared with last year. Tesco’s share has dipped slightly, from 30.6% to 30.5%, however this is an improvement on the performance seen throughout 2012, when the average share drop was 0.4%, suggesting that festive shoppers gave the retailer a welcome boost in the run up to Christmas.

“The well-publicised under-performance of Morrisons continues and it is the only big four supermarket to lose sales compared with last year. This highlights its need to address the lack of convenience outlets and an online offering in 2013, as already clearly identified by the retailer.”

The ongoing strong performances of the premium and discount ends of the market continued in the lead up to the festive period. Waitrose has achieved 5.4% growth, while Aldi, Lidl andIcelandposted respective growth rates of 30.1%, 10.8% and 9.7%. Iceland’s 2.2% share is a 12-year record for the retailer.

Edward Garner continues: “Historically, the discounter sector has seen its share dip at Christmas as shoppers treat themselves and trade up, but the all-time record share of 3.2% for Aldi is a sign of the times and shows that this is no longer the case. Aldi and Lidl both benefitted from carrying items such as goose, venison and fine wines in their pre-Christmas catalogues this year. It seems that offering premium products at budget prices has paid off for the discount retailers.

“The polarisation of the market is highlighted by consumer spend levels which were widely anticipated to drop this year. While 47% of shoppers did reduce their spend in the lead up to Christmas, 48% of shoppers increased their spend by 4.5% (the rate of inflation) showing that ‘two nations’ continues to be a key feature of the grocery market.”

The Kantar Worldpanel measure of grocery price inflation has sharply increased to 4.5%, suggesting that 2013 could bring a renewed period of pressure on household budgets as shoppers trade down to cope.

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