Summer sun warms grocery trade

Recent warmer weather has spurred the grocery trade with the market growing at 0.3% for the 12 weeks to 14 August 2016, according to the latest figures from Kantar Worldpanel.

However, grocery price deflation stood at -1.3% for the period, with shoppers now paying less for a representative basket of groceries than they did in 2015. This marks the 25th consecutive period of grocery price deflation.

At the same time, promotional sales dropped to their lowest level since September 2010, at 37.7% of overall grocery sales, as the major retailers continued to adapt their pricing models. This was “a significant decrease from the highs of over 40%” seen in 2015, according to Kantar.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said; “The sun’s eventual appearance was a welcome boost to the market after a delayed start to the summer. Fewer promotions doesn’t mean consumers are paying more for their shopping, but does reflect the renewed focus on own-label lines, which is visible across the market. Shoppers are clearly responding to the better value offered through own-label rather than money off, with own-brand goods growing at both ends of the price spectrum: premium retailer brands are up by 9% and value lines up by 2%.”

Lidl was once again the fastest-growing supermarket, with sales up 12.2%, increasing its share of the market by 0.4 percentage points on last year to 4.5%. Meanwhile, sales at Aldi rose 10.4%, with share up by 0.6% to 6.2%. Both discounters benefited from rising premium own-label sales.

Tesco’s sales fell 0.4%, the slowest rate of decline for the retailer in six months. Kantar suggested that the retailer’s decline, stretching back to March 2015 could soon come to an end. Tesco’s recent product launches have been making a positive impact on its performance with its somewhat controversial ‘Farm brands’ finding their way into over a quarter of the Tesco baskets during this period.

Sales at The Co-operative rose 2.8% compared to last year, taking its market share to 6.6%, the highest level since 2012. Waitrose sales rose by 1.4%, with market share static at 5.1%. However, sales for the remaining big four fell, with Sainsbury’s down 0.6% with 16.1% share of the market, Morrisons -1.8% with a 10.6% share and Asda down 5.5% with its market share falling 0.9 percentage points to 15.7%.

In June Kantar predicted that discounters would benefit from most from Brexit.

 

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