The latest Kantar Worldpanel data makes gloomy reading for Yorkshire’s two biggest retailers, Asda and Morrisons.
The pair were the worst performers among the nine leading UK grocery chains.
Sainsbury’s was the only one of the big four supermarkets to increase takings as discounters Aldi and Lidl continue to steal customers.
The big four are investing billions of pounds in price cuts, but Aldi and Lidl are enjoying stellar sales increases after 56 per cent of British households visited an Aldi or Lidl over the past 12 weeks.
The latest market share figures showed that Leeds-based Asda was the worst performing food retailer, with sales falling 2.9 per cent over the 12 weeks to September 13.
Sales at Bradford-based Morrisons fell 1.4 per cent and Kantar warned this is likely to get worse in the coming months as it unloads another 11 superstores and its M Local chain. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “There are no signs of recovery at Morrisons.
“Shopper numbers are falling and they are likely to continue to fall following the 11 store closure and the sale of the M Locals.”
Morrisons’ market share fell from 10.9 per cent to 10.7 per cent.
Analyst Bruno Monteyne at Bernstein said: “We think Morrisons is in a strategically difficult spot as they have both the biggest geographic and consumer overlap with the other value retailers (Aldi, Lidl, Asda) and will find it hard to differentiate against them.”
Asda’s market share fell from 17.3 per cent to 16.7 per cent over the past three months.
Compare this performance with Aldi, where sales leapt 17.3 per cent, and Lidl, where sales rose 16.0 per cent, and the trend is worrying to say the least.
In the past Aldi and Lidl have been seen as synonymous, with just one letter differentiating them, but there are changes afoot.
Lidl’s growth follows the success of its £20m “Lidl surprises” TV and print advertising campaign, aimed at persuading middle class shoppers that it sells quality products.
“This is part of Lidl’s longer term move to lose the discounter tag and become a mainstream supermarket,” said Mr McKevitt.
“They will never lose the focus on price but they’re adding a lot to it. The marketing is about the quality of the food not just the price.”
He added that more people are now doing their weekly shop at Lidl.
Lidl is now genuinely appeal-ing to middle class shoppers.
Forget the champagne and lobster gimmicks at Christmas, Lidl has embarked on a full year, full frontal attack on the big four grocers and it is eating away at their market share.
Meanwhile Aldi has a tight grip on its value credentials and with its base in the North this is hammering Asda and Morrisons’ sales.
Add to this Asda’s lack of convenience stores and Morrisons’ decision to sell off its M Locals, and the pair really look stuck in the doldrums.
There is also another threat on the horizon – will Amazon launch a supermarket delivery service?
It would tap into a growing trend as shoppers move their custom away from the traditional, larger-size supermarket stores to online.
The Kantar data showed that online sales are continuing to boom and are up by 12 per cent compared with a year ago.
Almost seven per cent of grocery sales are currently purchased through the internet.
If Amazon launches Amazon Fresh in the UK, the big four will face attack from a whole new side.
Amazon’s firepower means it can already undercut the supermarkets on non-food.
Asda’s American masters have given Asda’s CEO Andy Clarke full rein to protect profits over sales, but Morrisons lacks Wal-Mart’s fire power and protection.
Morrisons’ new CEO David Potts really does have his hands full.