The latest grocery share figures from Kantar Worldpanel, published on August 23 for the 12 weeks ending August 14, show the market growing at 0.3% as an upturn in the weather spurred consumers into increasing their spend giving rise to the the fastest acceleration for the overall market since March
“The sun’s eventual appearance was a welcome boost to the market after a delayed start to the summer,” says Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel. “Frozen confectionery sales grew by 23% in the last month, while chilled drinks increased by 10%. At Iceland, ice cream was the fastest growing category, helping it to an overall 2.8% increase in sales on last year. Meanwhile, price cuts such as the ‘7 Day Deals’ and summer loyalty promotions helped bring an additional 129,000 shoppers through Iceland’s doors.” It is the fourth month in a row the increasingly popular high-street retailer has experienced growth.
Meanwhile, sales at Co-op rose by 2.8% compared to last year, taking its market share to 6.6% – the highest achieved since 2012. Shoppers have heeded Co-op’s call to shop little and often with this growth primarily coming from an increased number of trips to the retailer. “Co-op’s run of growth stretches back over a year now,” says McKevitt.
Promotions pulled back
Promotional sales dropped to their lowest level of 37.7% since September 2010 as the major retailers continue to move towards more simple pricing models. “Clearly the ever-increasing share held by the discounters has helped rein in promotions, but deals have also reduced at Tesco, Sainsbury’s and Morrisons,” explains McKevitt.
The fall in sales on promotion is a stark contrast from the highs of over 40% the market got used to in 2015. “Fewer promotions doesn’t mean consumers are paying more for their shopping but does reflect the renewed focus on own-label lines which is visible across the market,” says McKevitt. “Shoppers are clearly responding to the better value offered through own label rather than money off, with own brand goods growing at both ends of the price spectrum: premium retailer brands are up by 9% and value lines up by 2%.”
McKevitt also points out that there remains no evidence of Brexit-fuelled inflation causing food prices to rise. In fact, grocery price inflation remains negative, with a representative basket of goods 1.3% cheaper than it was last year.
Once again Lidl is the fastest growing supermarket, with sales up 12.2%. The retailer witnessed strongest growth in its key produce, dairy and chilled aisles, increasing its share by 0.4 percentage points on last year to 4.5% of the market. Sales at Aldi rose by 10.4%, with share up by 0.6 percentage points to 6.2%. Both discounters benefitted from rising premium own label sales and forward planning by having their back to school ranges in store just as schools were breaking up.
Still tough at the top
Tesco’s sales fell by 0.4%, the slowest rate of decline in six months. “Current trends suggest the decline stretching back to March 2015 could soon come to an end,” says McKevitt. “Tesco’s recent product launches have been making a positive impact on its performance, with its ‘Farm brands’ finding their way into over a quarter of the Tesco baskets this period.”
Sales declined at Sainsbury’s by 0.6% and at Morrisons they fell by 1.8%, leaving the retailers with a 16.1% and 10.6% share of the market respectively. Asda’s decline of 5.5% remains unchanged from last month, with share falling by 0.9 percentage points to 15.7%. Waitrose sales rose by 1.4% with market share remaining at 5.1%.
Grocery inflation now stands at -1.3%† for the 12-week period ending 14 Aug 2016. This means shoppers are now paying less for a representative basket of groceries than they did in 2015. This is the 25th consecutive period of grocery price deflation. Falling prices reflect the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories such as bacon, detergents, snacks and butter.