Britain’s grocers had something to smile about yesterday after the food market appeared to be slowly returning to growth, despite a disappointing Christmas.
Grocery sales increased by 0.2 per cent in the 12 weeks to January 31 with fresh foods performing particularly well as Britons kickstarted the new year with healthy eating regimes, according to Kantar Worldpanel.
Although the sales growth was so slight as to appear flat, it showed an improvement in a highly challenging sector and reversed a 0.2 per cent fall in sales over the festive period.
The increase also reflected a better performance by the under-pressure “big four” supermarkets, particularly Tesco, whose revenue fell by 1.6 per cent, but this was the best result posted by the group since last September.
J Sainsbury also performed well for the sixth period in a row with sales up by 0.6 per cent. This pushed its market share up by 0.1 percentage points to 16.8 per cent.
However, the big winner was the Co-operative Group which, for the first time since 2011, was the fastest growing supermarket retailer, excluding the discounters. The convenience-focused grocer’s sales jumped by 1.4 per cent during the period after shoppers responded well to its own-label brands.
Grocery market share — 12 weeks to January 31
- Tesco: 28.4%
- J Sainsbury: 16.8%
- Asda: 16.2%
- Wm Morrison: 10.8%
- The Co-operative: 5.9%
Kantar Worldpanel said that the Co-operative was also the most frequently visited large supermarket group with its customers shopping there an average of almost 19 times during the past 12 weeks, compared with a market average of 11 visits. Overall, the Co-op’s market share remained stable at 5.9 per cent.
Steve Murrells, retail chief executive at the Co-op, said the group was beginning to show good momentum: “We are focussed on revamping our store estate, boosting food quality and continuing to offer great value for money and Kantar’s figures show that our plan is working.”
The German discounters continued to produce the fastest growth in sales with those at Lidl and Aldi up by 18.7 per cent and 13.7 per cent, respectively. Jonathan Neale, joint managing director for buying at Aldi, said it planned to open more than 80 supermarkets this year, which would generate an extra £1 billion of annual sales.
Fraser McKevitt, head of retail and consumer insight at Kantar, said that both discounters would continue to take market share this year as they opened more outlets.
Wm Morrison has continued to struggle although its sales decline lessened to 2.2 per cent in the 12 weeks. Some of the revenue fall at the Bradford-based group reflected the impact of the sale of its 140-strong convenience store portfolio and the closure of some of its bigger shops.
Asda recorded the worst performance with sales dropping by 3.8 per cent and its market share falling back to 16.2 per cent.
At the upper end of the market, Waitrose’s performance was “static” with sales increasing by 0.1 per cent. This is the mutual’s 91st consecutive period of growth — the longest run of success for any supermarket chain.
Separately, Nielsen, the information group, reported that sales volumes at grocery stores in Britain declined by 0.8 per cent in the four weeks to January 30. It said Asda had the largest drop with year-on-year sales down 4.4 per cent and Sainsbury’s recording the only increase of 0.2 per cent.
Mike Watkins, Nielsen’s UK head of retailer and business insight, said “shopper promiscuity” was hurting retailers’ performance adding: “Asda, in particular, is being impacted by this disloyalty as low prices are no longer a clear differentiator when so many supermarkets price match.”