The U.K. grocery market has returned to slow growth after a disappointing Christmas period, delivering a take-home sales increase of 0.2 percent for the 12 weeks ending 31 January 2016, according to the latest share figures released by Kantar Worldpanel. While the overall grocery market’s growth has been slight, New Year health drives have contributed to a strong performance across fresh foods.
“Consumers are clearly striving for a healthier start to the year and have turned to fresh foods – particularly fruit and vegetables, which have both grown sales by 5 percent. Given that they’re still experiencing like-for-like deflation it’s a significant revenue growth for both categories, shared across both traditional and discount retailers. Similar growth has been seen in nuts, fresh poultry and fish,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
For the first time since 2011, the Co-operative was the fastest growing non-discounter, increasing sales by 1.4 percent. The convenience-focused grocer grew its own-label sales by 7 percent, with sales up fastest in the fresh and chilled part of the store. The Co-operative is the most frequently visited major supermarket – its customers shopped there an average of almost 19 times over the past 12 weeks, compared with a market average of 11 visits. Its market share remains stable at 5.9 percent.
Meanwhile, recent trends at Aldi and Lidl continued. Both the discount retailers saw their growth accelerate – Lidl to 18.7 percent and Aldi to 13.7 percent. They also saw their share of the market increase by 0.7 percentage points, with Lidl’s rising to 4.2 percent and Aldi’s to 5.6 percent – a dip from the 10 percent combined market share high they experienced at the end of 2015, said McKevitt.
“We can expect both retailers to continue to take market share this year as they fulfill their plans for more outlets.”
Sainsbury’s increased its sales for the sixth period in row, growing by 0.6 percent with a resulting market share increase of 0.1 percentage points to 16.8 percent. Meanwhile, Tesco showed signs of improvement – while revenues fell by 1.6 percent these were the best numbers posted by the retailer since September of last year.
At Morrisons, the sales decline lessened to 2.2 percent, while market share fell by 0.3 percentage points to 10.8 percent. Kantar Worldpanel said Morrisons’ revenues would continue to reflect its disposal of 140 M Local stores and the closure of some larger outlets through the rest of 2016.
Also, Asda’s recent announcement of renewed price cuts has not yet had time to materially affect its latest 12-week figures, with sales falling by 3.8 percent and share falling back to 16.2 percent.
While Waitrose’s market share remained static at 5.2 percent, sales increased by 0.1 percent. This made it the 91st consecutive period of growth for the retailer – the longest current run of success for any supermarket.
U.K. grocery inflation stood at -1.6 percent for the 12-week period ending 31 January, meaning shoppers were paying less for a representative basket of groceries than they did in 2015. This was the 18th consecutive period of grocery price deflation.
