Bread prices and discounters impact inflation

Grocery inflation is at -1.7%, reflecting the impact of Aldi and Lidl, as well as deflation in major categories like bread.

Figures for the 12 weeks ending 21 June 2015 from Kantar Worldpanel show inflation has increased from the -1.9% reported last month. This means shoppers are now paying less for a representative basket of groceries than they did in 2014.

Earlier this year, supermarkets slashed the prices of its loaves further in a raft of price cuts. Asda now sells a 400g granary farmhouse loaf at 50p, down from 80p. For the market in general, unit sales of wrapped bread across the three major brands and own-label fell 4.5% year-on-year and price deflation was pushed value down 9.6% [IRI 52 w/e 6 December 2014]. 

Meanwhile in the supermarket race, discounters have continued to increase sales and market share, while Tesco, Sainsburys and Asda numbers take a hit.

Aldi and Lidl boosted sales by 15.4% and 9.1% respectively, in the same 12 week period.

Sales fell by 1.3% at both Tesco and Sainsbury’s, and 3.5% at Asda. The only member of the big four which saw growth was Morrisons. Sales were up 0.6%, and market share up 0.1%, its first market share gain since December 2011.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Morrisons has seen the largest sales increase among the ‘big four’ retailers for the second month in a row, recording a sales growth of 0.6%, which has been supported by an increase in online shopping.  Continuing to grow ahead of the market, the retailer has increased its market share to 11.0%, up 0.1 percentage points compared with a year ago.  While only a small increase against a weak 2014, this does represent the first market share gains made by Morrisons since December 2011.”

The report from Kantar Worldpanel said: “Aldi and Lidl showed no signs of slowing down and are continuing to take share away from the competition.”

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