Industry & Business

Price Competition Causes Historic Lows in UK Grocery Market Growth

Price Competition Causes Historic Lows in UK Grocery Market Growth

Price Competition Causes Historic Lows in UK Grocery Market Growth
June 17
09:56 2014

The latest supermarket share figures from Kantar Worldpanel, for the 12 weeks ending 25 May 2014, show a slowdown in grocery market growth to 1.7% – the lowest level for at least 11 years. Supermarket price competition is prompting another drop in the level of grocery price inflation to 1.2%.

Edward Garner, director at Kantar Worldpanel explains: “Despite the wider market slowing, Lidl achieved a record share of 3.6% this period, accelerating with its highest ever year-on-year growth of 22.7%. Similarly, Aldi has gained 35.9% and retains its record 4.7% share reached last period.”

He adds: “At Waitrose, managing director Mark Price’s tactic of being “everything that the discounters aren’t” seems to have paid off for the retailer. By differentiating its offer, Waitrose has maintained its all-time record share of 5.1% secured last period. Meanwhile, Asda surpassed its rivals with a market-beating growth of 2.4%, lifting market share to 17.1%, compared with 17.0% a year ago. Asda is the only large grocer to grow share year-on-year”.

Tesco, Sainsbury’s and Morrisons have all lost market share since this period last year, while Tesco and Morrisons recorded sales drops of 3.1% and 3.9% respectively. Among the smaller retailers, Iceland’s growth rate has dropped back to average market levels with its share remaining at 2.0%, whereas Farmfoods is mirroring the likes of Aldi and Lidl, growing sales by 27.1%.

Grocery inflation has shown its eighth successive fall and now stands at 1.2% for the 12 week period ending 25 May 2014. This is the lowest level since May 2010 and reflects the impact of Aldi and Lidl and the market’s competitive response.

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