Premium and discount to carve Christmas market share away from Big Four
Sainsbury’s is set to continue its Big Four market beating growth, with share gains this Christmas

Premium and discount to carve Christmas market share away from Big Four

Gill McShane
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Christmas is a busy date on the UK grocery retail calendar and with shoppers anticipated to spend more on their festive food this year, the stakes are high for the supermarkets to win their share of the sales. To understand who the expected winners and losers may be in 2015, Produce Business UK brings you exclusive analysis from Kantar Worldpanel UK

View the full presentation here.

UK shoppers will continue with their large Christmas purchases this year, according to Chris Cowan, consumer insights director at Kantar Worldpanel UK, after the largest shopping trip during Christmas 2014 reached an average of £71.33.

“One in four households [25%] will spend over £100 on their largest trip,” he says, “while we expect two thirds of people to do their Christmas shop at the same supermarket as last year.”

Cowan notes that the last few years have taught Kantar that Christmas is a time for shoppers to trade up. “The premium end of the market tends to do well, with Sainsbury’s and Waitrose typically growing their share [by 0.1%-0.3%],” he explains.

“Additionally, the big Christmas shop has suited Asda, which also sees uplift in its market share [0.2%].”

Nonetheless, of the Big Four – Tesco, Sainsbury’s, Asda and Morrisons – Kantar expects Sainsbury’s will continue its market beating growth, and to see share gains this Christmas.

“However, with the growth of the discounters increasingly fighting for share, we could expect them to be nudging an overall 10% [UK grocery market] share figure this year [up from 8% in 2014], which is slightly behind their non-Christmas share,” adds Cowan.

Indeed, turning to Slide 2 of Kantar’s presentation, the analyst anticipates Aldi and Lidl will grow their market share by a sizeable percentage during Christmas 2015. Meanwhile, both Waitrose and The Cooperative are tipped to experience gains, albeit by a smaller increase. Iceland’s share is likely to be flat, if slightly lower, during the festive period.

Therefore, if current trading continues, Kantar forecasts the Big Four’s total market share for Christmas 2015 (the 12 weeks to January 4, 2016) will slip to 72.4% – the lowest since 2003, when the Big Four included Safeway and not Morrisons.

Looking at Slide 3, the analyst predicts Tesco’s share will drop to 28.2%, Asda’s will fall to 16.1% and Morrisons’ to slide to 11%, while Sainsbury’s is tipped to edge up to 17.1%.  

Even so, Cowan says the Big Four will still dominate. “During the run up to Christmas, we expect the Big Four to continue to have the busiest tills because 85% of all shopping trips will be made at Tesco, Sainsbury’s, Asda and Morrisons,” he points out.

Typical share gains at Christmas, vs pre-Christmas

Sainsbury’s +0.3%
Asda +0.2%
Waitrose +0.1%
Iceland +0.1%
Aldi 0.0%
Morrisons 0.0%
Lidl -0.1%
Tesco -0.2%
The Cooperative -0.2%

Product performance

Product-wise, Cowan says “the Christmas effect” is key to a number of unsurprisingly seasonal lines. See Slide 5 for Kantar’s top 10 Christmas markets, ranked by the percentage of sales achieved during the four weeks over Christmas.

“The big Christmas lunch and festive entertaining see smaller markets highly reliant upon getting Christmas ‘right’,” he explains. “Yet the importance of the Christmas period on some large categories – especially alcohol, confectionary and sweet baking – sees hundreds of millions of pounds of uplift during this time. These are the key markets in which retailers need to win, if they’re to win Christmas overall.”

Within the produce category, read this article recently published on Produce Business UK to learn more about which fruits and vegetables are likely to win Christmas spend this year, and how price is set to be the driver of those sales.

Apart from legumes, Kantar Worldpanel UK claims each of the wholehead produce sectors experienced volume growth last Christmas. In particular, the holiday season is a crucial time for citrus, brassicas, root crops and potatoes, with between 8% and 11% of their total volume being sold in the four weeks surrounding Christmas.

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