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New figures: grocery market slips into decline

New figures on the grocery market show the market slipping into decline for the first time since January with supermarket sales falling by 0.2% in the 12 weeks ending 19 June.

GENERAL MERCHANDISE

New figures: grocery market slips into decline

The figures from Kantar Worldpanel also show that like-for-like grocery prices declined by 1.4% on last year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “The decline is a continuation of the slow supermarket sector growth dating back to summer 2014, primarily a result of cheaper everyday groceries brought about by a retailer price war.

“While these latest figures predate the EU referendum result, the immediate economic uncertainty is unlikely to cause a substantial fall in grocery volumes, as demonstrated by the 2008 financial crisis when basic food, drinks and household sales proved resilient.

“With an estimated 40% of the food we consume sourced from overseas, any long term change in exchange rates may threaten the current period of cheaper groceries. Historically, higher prices have led to consumers looking for less expensive alternatives such as own-label products, seeking out brands on promotion or visiting cheaper retailers.”

The combined share of retailers Lidl and Aldi hit a record high of 10.5% in the period, with each holding 4.4% and 6.1% of the market respectively. Kantar said almost 58% of UK shoppers visited one of the two retailers in the past 12 weeks, with Lidl increasing sales by 13.8% and Aldi by 11.5% on a year ago.

The performance of the larger retailers was a continuation of recent trends. Overall sales at Tesco dropped by 1.3%, while at Morrisons sales fell by 2.4%, both reflecting the ongoing impact of store disposals. At Sainsbury’s sales fell by 1.4%, while at Asda they were down by 5.9%, with each of the big four losing market share on last year.

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