The Co-operative returns to growth as Sainsbury's reclaims second position

The Co-operative returns to growth as Sainsbury’s reclaims second position

Gill McShane
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The latest grocery share figures from Kantar Worldpanel, for the 12 weeks ending July 19, 2015, show slow gains for Britain’s grocery market. Overall sales have risen by 0.8% compared with a year ago, and stronger growth is being enjoyed by the smaller retailers. Watch the video here

Indeed, The Co-operative has returned to growth for the first time since July 2014, increasing its sales by 1%, notes Fraser McKevitt, head of consumer and retail insight at Kantar Worldpanel.

“The Manchester-based grocer’s focus on its convenience offer has been rewarded with an increase in shopper numbers, which have risen by 133,000,” he explains. “While The Co-operative’s growth is slightly ahead of the market, its overall share of 6.3% has remained the same as last year.”

Despite a fall in sales of 0.3%, Sainsbury’s has edged its market share of 16.5% ahead of Asda, which now stands at 16.4%.

Sainsbury’s has returned to its position as the nation’s second-largest supermarket for the first time since January, boosted by non-food sales, the group’s Sainsbury’s Local outlets and faster market growth in the south of the country, where it operates a larger number of stores.

At Waitrose, meanwhile, growth has accelerated and sales have risen by 3%. Customers have taken advantage of the recently introduced ‘Pick Your Own Offers’ initiative to push Waitrose’s market share up to 5%, an increase of 0.1 percentage points compared with last year.

The continued slow growth of the overall market can be explained by minimal volume growth and lower like-for-like prices, both as a result of cheaper commodity prices and the fierce competition between supermarkets, according to McKevitt.

“Comparable groceries are now 1.6% cheaper than a year ago, meaning prices have been falling since September 2014, although they are projected to start rising again by early 2016,” he points out.

During the same 12-week period Aldi’s sales grew by 16.6%, while Lidl saw growth of 11.3%, meaning both discount retailers have moved to new market share highs of 5.6% and 4% respectively.

Among the ‘big four’ retailers, Morrisons was the best performer, although its sales fell by 0.1%. Meanwhile, sales at Tesco contracted by 0.6% and at Asda by 2.7%.

Conversely, at Iceland sales were up by 3%, coinciding with its recent ‘Power of Frozen’ advertising campaign.

An update on inflation

Kantar Worldpanel says UK grocery inflation now stands at -1.6% – based on over 75,000 identical products compared year-on-year in the proportions purchased by shoppers.

This is an increase from the -1.7% reported last month and means that while prices are still falling, the rate of decline is slowing.

Nonetheless, UK shoppers are still paying less for a representative basket of groceries than they did in 2014.

The falling prices reflect the impact of Aldi and Lidl and the UK grocery market’s competitive response, as well as deflation in some major categories, including: eggs, butter and bread.

To view and analyse Kantar Worldpanel’s Grocery Market Share data online, the firm has launched a new data visualisation tool.

The latest sales share figures for all of the major grocers can be viewed and compared with historical figures here.

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