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Premiumisation puts the pressure on Asda

The latest grocery market figures from Kantar Worldpanel, published today for the 12 weeks ending 5 September 2010 show respectable growth in the market at 4.3%, ahead of grocery inflation at 2.7%.

GENERAL MERCHANDISE

Premiumisation puts the pressure on Asda

According to Kantar, the increase in Grocery inflation is caused by a comparison with falling prices a year ago rather than sharp commodity price increases which have featured in recent news items.
Despite the recent media scare around soaring food prices, Kantar Worldpanel still expects grocery price inflation to be held to around 4% by the year-end.

This 4.3% growth sets the baseline that retailers must match if they are to hold share, and fortunes continue to be mixed among the big four retailers. Sainsbury’s and Morrisons have delivered another strong set of results with both lifting their market share and growing ahead of the market at 5.5% and 5.9% respectively. Of particular note is the unabated recovery of Sainsbury’s which has recorded a year-on-year share growth for its nineteenth successive report. 

By contrast, while Tesco remains largely unchanged Asda continues to underperform the market with a growth of just 2.6% and has seen a dip in its market share for the ninth consecutive report.

Edward Garner, Communications Director at Kantar Worldpanel explains: “While uncertainty in the economy means that value is still important consumers are placing increasing importance on the freshness and quality of the food they buy. This is evident in the premiumisation we have seen in the grocery market and the strong performances of Sainsbury’s and Waitrose – which recorded another admirable growth of 9.3% this month. Recent statements from Asda’s chief executive Andy Clarke show that the retailer has recognised the need to adjust its strategy and we’ve started to see a greater emphasis on quality in the latest advertising campaign.”

The Discounters continue to languish behind the market with only Lidl recording a slight increase in market share this month and Netto experiencing a decline in its year-on-year growth of 6.0%. By contrast the Independents maintain their footing in the market following a good summer – a tribute to the smarter operators remaining in the convenience sector. Meanwhile the Co-operative conversion programme is nearly over and Somerfield has all but disappeared from the high street with just a 1.0% share left in the market. 

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