UK Grocery Market Grows As Price Rises Continue

7March 2017

@KWP_UK

UK grocery market grows as price rises continue

The latest grocery market share figures from Kantar Worldpanel, published today for the 12 weeks ending 26 February 2017, show supermarket sales grew at their fastest rate since June 2014 – up by 2.3% compared to the same time last year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “Like-for-like inflation has doubled since last month to stand at 1.4% during the past 12 weeks. However, when placed in their longer-term context, these price increases are still fairly minimal.

“Staples such as butter, tea and fish all saw pricesrise by more than 5% during the past 12 weeks, as fruit and vegetables – many of which are imported – also saw an uptick in price. However, it’s important to point out thatinflation isstill far from universal, with prices actually falling across a number of categories including crisps, bacon and eggs.

“While consumers may be starting to feel a very slight pinch, increased inflation has led to overall market growth. Simultaneously, combined sales at the UK’s four largest supermarkets increased by 0.5% year on year. This is a timely reminder that despite the huge interest in the discounters during recent yearsthe big four remain a force to be reckoned with: they still hold just over 70% of the market, with almost 99% of the population shopping in a Tesco, Sainsbury’s, Asda or Morrisons during the latest quarter.”

Individually, Morrisons grew ahead of the market with a sales increase of 2.6% signalling its fastest growth in five years. Holdingmarket share steady year on year at 10.6%, the retailer’spositivebricks and mortar performancewas buoyed further by the continued rapid expansion of its e-commerce business.

Tesco increased sales for the sixth period in a row –a run it hasn’t experienced since January 2014 – although this wasn’t enough to stop the grocer’s market share slipping by 0.5 percentage points to 27.9%. Asda was the only retailer to see sales fall during the past 12 weeks, but a decline of just 0.8% representsa significant improvement and isthe grocer’s best performance since November 2014.

Fraser McKevitt continues: “To the catchy soundtrack of its new ‘food dancing’ advertising campaign, Sainsbury’s returned to growth for the first time since March last year, with sales up by 0.3%. At the same time, its market share slipped by 0.3 percentage points leaving the grocer with 16.5% of the market.

“Lidl became Britain’s fastest growing supermarket during the past 12 weeks – with sales up by 13.0% – while Aldi grew almost as quickly, increasing sales by 12.9% to reach a record market share of 6.3%. Also growing ahead of the market was Iceland, with sales up 8.8%. Meanwhile Co-op and Waitrose bothincreased sales by 1.7% and 2.9% respectively.”

There were signs of changing shopping habits too. Havingpeaked at just over 40% of salesin 2015, the proportion of groceries sold on promotion continues to decline, fallingto 34.3% during the past 12 weeks – its lowest level since October 2009. The most dramatic shift has been a move away from multi-buy promotions, with shoppers spending half a billion less on these types of deals than last year.

Fraser McKevitt comments: “Despite the general move away from multi-buys, meal deals remain popular – particularly around Valentine’s Day. Premium meal deals,which offer dinner for two at a price point of £10 or above, were bought bynearly 2 millionconsumers in Februaryas Valentine’s Day offered a welcome opportunity to splash out.

“In fact, British diners spent £9 million more on premium meal deals than during the same period last year, suggesting that celebrating special occasions at home is an increasingly appealing option. 1.2 million shoppers boughtstill wine as part of their premium meal deal, 700,000 plumped for sparkling wine and 840,000 bought chocolates.”

Ends

An update on inflation

Grocery inflation now stands at +1.4%* for the 12 week period ending 26 February 2017. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Rising prices in markets such as butter, fish, tea and fresh lamb have been partially offset by falling prices in categories including crisps, bacon, eggs and fresh poultry.

*This figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by shoppers and therefore represents the most authoritative figure currently available. It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods – shoppers are likely to achieve a lower personal inflation rate if they trade down or seek out more offers.

Kantar Worldpanel’s data visualisation tool allows you to view and analyse Grocery Market Share data online. The latest sales share figures for all of the major grocers can be viewed and compared with historical figures here and all graphics within the Kantar Worldpanel dataviz are available to embed in your site.

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Notes to editors

Please note that four week ending or six week ending retailer share data should not be used in media reporting. We would recommend that you use the 12 week ending data stated in this release, as it covers a longer time period which means it is a superior indicator of retailer performances and trends.

For all publicly-quoted Worldpanel data, users of our research (including media) must ensure that data is sourced to‘Kantar Worldpanel’.

These findings are based on Kantar Worldpanel data for the 12 weeks to 26 February 2017. Kantar Worldpanel monitors the household grocery purchasing habits of 30,000 demographically representative households in Great Britain. All data discussed in the above announcement is based on the value of items being bought by these consumers.

For further information, please contact:

Rebecca Daley / Alyona Levitin
Camargue
+44 (0)20 7636 7366
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Retailer growth figures reported by Kantar Worldpanel relate to overall take home sales, and so include the impact of store openings or closures. Like-for-like sales change is not measured or reported. Calculating like-for-like sales requires a detailed knowledge of store openings and extensions which is information held accurately only by individual retailers.

Kantar Worldpanel will only support data that is published in the context we have presented it and our own interpretation of these findings. Our commentary is based upon our own data and information in the public domain. We cannot be held responsible for any other interpretation of these findings.