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Big four supermarkets come under pressure in battle for grocery market share

Latest figures on the grocery market have revealed that the big four supermarkets are coming under pressure as price becomes less of a differentiator for shoppers and the budget and premium ends of the market continue to grow

GENERAL MERCHANDISE

Big four supermarkets come under pressure in battle for grocery market share

Latest figures on the grocery market have revealed that the big four supermarkets are coming under pressure as price becomes less of a differentiator for shoppers and the budget and premium ends of the market continue to grow

Figures released by Kantar Worldpanel for the 12 weeks ending 15 September 2013, show that discount retailers Aldi and Lidl continued to perform strongly in the period. While Aldi posted record year-on-year sales growth of 32.7%, Lidl achieved growth of 14.3%. Meanwhile, upmarket grocer Waitrose showed no sign of running out of steam with sales growth of 9.7%.

Edward Garner, director at Kantar Worldpanel, explained: “Strong performances by retailers at both ends of the market pose a significant challenge for the big four supermarkets. The combined growth of Lidl, Aldi and Waitrose has taken three market share points out of the grocery market over the past three years and is forcing the major supermarkets to compete for an ever-smaller middle ground.

“Price match promotions such as Asda’s ‘Price Guarantee’, Sainsbury’s ‘Brand Match’ and Tesco’s ‘Price Promise’ have meant that price is less of a differentiator and shoppers cannot be convinced to switch outlets based on cost alone. There has been a renewed focus on providing high-quality own label products and this strategy seems to be paying dividends. The upmarket ranges of Tesco Finest and Sainsbury’s Taste the Difference have both registered double digit growth as shoppers respond to the premium offer.”

Sainsbury’s is the only big four supermarket to have increased its market share over the past year, growing it from 16.4% to 16.6% and recording sales growth of 5.1%. The other big retailers all lost market share, although Asda beat Tesco and Morrisons with regard to year-on-year sales growth with an increase of 2.4% in the 12 week period. 

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