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Insight: UK grocery market grows as price rises continue

New figures on the grocery market show that supermarket sales grew at their fastest rate since June 2014 in the 12 weeks to 26 February, rising… View Article

FOOD AND DRINK NEWS UK

Insight: UK grocery market grows as price rises continue

New figures on the grocery market show that supermarket sales grew at their fastest rate since June 2014 in the 12 weeks to 26 February, rising by 2.3% compared to the same time year.

The figures from Kantar Worldpanel reveal that staples such as butter, tea and fish all saw prices rise by more than 5% while fruit and vegetables also increased in price. However, prices fell across categories such as crisps, bacon and eggs.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explained: “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.

“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 years the 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.”

Kantar’s figures show that Morrisons grew ahead of the market with a sales increase of 2.6% to mark its fastest growth in five years. With its market share steady year-on-year at 10.6%, the retailer’s performance was boosted by continued expansion of its online business.

Tesco increased sales for the sixth period in a row although its market share slipped by 0.5 percentage points to 27.9%.

Asda was the only retailer to see sales fall during the past 12 weeks with a decline of 0.8% although this was its best performance since November 2014.

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 the UK’s fastest growing supermarket during the period with sales up by 13%. Aldi grew almost as quickly, growing 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 both increased sales by 1.7% and 2.9% respectively.

Kantar also found that the proportion of groceries sold on promotion continued to decline in the period, falling to 34.3% to reach its lowest level since October 2009.

McKevitt said: “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 by nearly 2 million consumers in February as 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 bought still wine as part of their premium meal deal, 700,000 plumped for sparkling wine and 840,000 bought chocolates.”

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