The latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 11 October 2015, show overall supermarket sales growth up by only 0.8 per cent compared with a year ago.
Despite a more buoyant overall economy, supermarket revenue growth has not reached above one per cent since March 2015.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “With like-for-like grocery prices 1.7 per cent lower than last year, the supermarket price war shows no signs of abating. Consumers have now enjoyed more than 12 months of continually falling prices and are currently pocketing these benefits rather than splashing out on substantially more grocery items, with overall volume growth of only two per cent.
“This equates to £1.5 billion taken out of the market in the last year, saving each household £58 on average.”
Sainsbury’s was the only one of the larger supermarkets to see sales growth this period, and a strong performance in its online and Local stores helped it to increase revenues by 1.1 per cent, though market share was static at 16.1 per cent. Sales fell at Tesco by 1.7 per cent, though it is too early to see the impact of its revamped ‘Brand Guarantee’ initiative, Kantar said. At Asda sales fell by 3.0 per cent, bringing its market share down by 0.7 percentage points to 16.6 per cent. Meanwhile, sales at Morrisons fell by 1.0 per cent, taking share to 10.8 per cent.
In contrast to the overall market, online grocery sales have increased by 9.8 per cent on last year. Despite this rapid expansion, space for retailers to increase both share and revenue in this area remains, with less than a fifth of households currently shopping online.
Mr McKevitt added: “Internet sales offer a chance of long term growth – only 18 per cent of households bought groceries online in the last 12 weeks meaning there’s plenty of space for further expansion.
“The convenience factor and minimum spend restrictions mean online baskets tend to be larger, averaging £67 in value, compared with £14 for the average bricks and mortar trip. Amazon Fresh’s expected full launch early next year could be a major disruptor, bringing down average basket sizes, accommodating on demand shopping, and accelerating the growth of the whole online market.”
After a slowdown earlier this year, the discounters have both seen their rate of growth return to above 17 per cent during this period. Mr McKevitt said: “For the second successive month Lidl has reached a new share high, now claiming 4.3% per cent of the market and growth accelerating to 17.9 per cent. Growth was particularly strong in Scotland, the scene of its ‘smarter shopping’ card trial. It’s a similar story for Aldi, where revenues are up 17.6 per cent on a year ago.”
There has been further success this period for Waitrose, up by 2.1 per cent; the Co-operative, where sales grew by 1.0 per cent and Iceland, growing for the sixth month in a row and increasing sales by 3.2 per cent, benefitting from a wider range of premium products.