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UK Grocery Spend Comes Under Pressure as Inflation Rises

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UK Grocery Spend Comes Under Pressure as Inflation Rises

UK Grocery Spend Comes Under Pressure as Inflation Rises
August 18
11:37 2011

The latest grocery share figures from Kantar Worldpanel, for the 12 weeks ending 7th August 2011, show the UK grocery market growing at 3.8% per year, below the 5.2% grocery price inflation in this period.

 

“It is evident that shoppers are trying to manage their ‘personal’ inflation by trading down. This can be done by seeking out lower priced outlets and cheaper alternative products,” explains Edward Garner, director at Kantar Worldpanel. “It’s therefore unsurprising that the discounters have pushed further ahead this month.”

 

Lidl has recorded year-on-year sales growth of 13.8% enabling it to retain its record market share of 2.6%. However, the stand-out performance comes from Aldi this month, with growth of 24.4% and an all-time record share of 3.6% – up from 3.0% a year ago.

 

He continues: “While the discounters are prospering we are not seeing the shift towards consumers buying more own-label products that might be expected from cost cutting. In fact, budget own-label is showing only muted growth of 2%, while premium own-label is growing at over 8%, confirming that despite economic pressures, low-price is not the only motivation in this market. This is further demonstrated by the continued ‘two nations’ theme, as Waitrose shrugs off any gloom with sales growth of 8.3% – over double the market growth.”

 

This is a challenging market for the big four grocers, which have to appeal to a broad range of consumers, unlike the discount and premium niche players. Only Morrisons has managed to add share this period (11.6% to 11.7%), with year-on-year growth of 4.6% – slightly ahead of the market.

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