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ASDA feels the heat as retail battle hots up.

The latest grocery market figures from Kantar Worldpanel show mixed fortunes for the major retailers as low inflation continues to bite.

GENERAL MERCHANDISE

ASDA feels the heat as retail battle hots up.

The latest grocery market figures from Kantar Worldpanel show mixed fortunes for the major retailers as low inflation continues to bite.

The pressure on the retailers to deliver real growth is mounting as total Grocer market growth has remained subdued at 3.3% this month. Some are faring better than others in the battle for share of consumers’ wallets, with Tesco holding its market share at 30.6% and matching market growth. Continuing a strong run, Sainsbury’s and Morrisons both increased their market share in May and recorded growths well ahead of the market at 4.4% and 6.0% respectively.

Conversely, Asda continues to feel the pinch with a drop in market share for the fifth consecutive month and growth behind the market at 2.5%.

Edward Garner, Communications Director at Kantar Worldpanel, explains: “As Andy Clarke takes the helm, there has been much speculation about what the new Chief Executive will do to turn around Asda’s fortunes. We expect him to focus on restoring the clarity of Every Day Low Prices as well as reviewing the implementation of range rationalisation. Asda has already named these areas as a key priority going forward as shown by the launch of the Asda Price Guarantee and it will be interesting to see the results of the new strategy in the coming months.” 

Asda’s focus on value may be working against the company with the latest figures showing that consumers are continuing to shop at the premium end of the market. Tesco’s Finest Range continues to perform well, while premium retailer Waitrose has maintained high growth at 12.5%. The Co-operative has unsurprisingly delivered the fastest growth this month at 16.5% as Somerfield all but disappears from the high street.

Despite strong growth at the premium end of the market, there is evidence that value for money is returning to the agenda for some shoppers. Iceland lifted its share by 0.2% and recorded its strongest growth for a year but fortunes are mixed among the Discounters, with Lidl and Netto still struggling to keep pace with the market. Meanwhile the consolidation of stores coupled with a strong television advertising campaign featuring celebrity chef Phil Vickery has brought shoppers back to Aldi and boosted its market share to 3.1%.

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