Morrisons outperforms its big four rivals

Morrisons was the '‹star performer among the big four grocers'‹ over the last quarter as shoppers flock back to its stores.
Morrisons is enjoying a renaissance under CEO David PottsMorrisons is enjoying a renaissance under CEO David Potts
Morrisons is enjoying a renaissance under CEO David Potts

The Bradford-based grocer is enjoying a renaissance under CEO David Potts, who is returning the group to the traditional values held by former boss, Sir Ken Morrison, who died last week after a short illness.

Morrisons emerged as the ​fastest-growing retailer ​out of the big four, increasing its market share for the first time since June 2015 with a sales uplift of 1.9​ per cent​ year on year​, according to Kantar Worldpanel​.

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​The group was helped by strong demand for its premium own label ​products which saw a 35 per cent sales increase although growth was seen across the group’s ranges.

​Morrisons’ revamped The Best range made its way into 14 per cent of Morrisons baskets.

There was also good news for Leeds-based rival Asda, which saw sales decline by just 1.9 per cent in the 12 weeks to January 29, a marked improvement on previous declines. Asda saw an ​increase in the number of shoppers visiting its stores compared with the same period last year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Morrisons’ growth is coming from across the store, which is good for them.

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“Some of the success has come from simplification, a simpler product range and less promotions.”

The negative effect of Morrisons’ store disposals has now disappeared from the data.

Mr McKevitt said that Asda’s most important improvement was getting more shoppers through the door.

“They are doing a better job at appealing to their core shopper. Lower middle class families are returning to the store. They are also keeping a sharp eye on prices.”

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The other big news was that discounter Aldi has overtaken the Co-operative to become Britain’s fifth biggest grocer.

Aldi’s sales rose 12.4​ per cent over the last quarter​, taking its market share to 6.2​ per cent​, ahead of the Co-op’s 6​ per cent​​.

“Aldi are getting a lot of new shoppers through the door and some of that will be due to new store openings,” said Mr McKevitt.

“​They have plans to open more stores and we’ll see their market share rise.”

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He said that Aldi’s average basket size is £19 so customers are choosing to do a sizeable shop there rather ​than buy a couple of items.

The past quarter saw Aldi attract 826,000 more shoppers than during the same period last year, underpinned by an extensive programme of store openings.

Overall supermarket sales ​rose 1.7​ per cent​ on last year, with eight of the nine major retailers seeing growth over the quarter.​ Asda was the only one to see a decline.​

Kantar ​Worldpanel ​said ​the well-documented ​supply issues affecting fresh produce over the last few weeks had affected sales.

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“11 million households buy courgettes annually, but supply issues contributed to 759,000 fewer shoppers buying them this January – that’s a 31​ per cent​ drop in spending compared with the same month last year​,” said Mr McKevitt.

​“Sales of spinach also fell by 12​ per cent​ in a clear sign that the poor weather in southern Europe has had a tangible impact on British shopping baskets.”

​However he said that the supply problems will not have a major impact.

“If courgettes are not available you can have broccoli with your supper. These supplier issues will be resolved,” he said.

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Tesco​‘s sales rose​ for the fifth period in a row - albeit at a slower rate than previously - with sales up 0.3​ per cent​, resulting in a market share drop to 28.1​ per cent​.

Sainsbury’s sales remained flat​.

Rising prices​,​ which consumers saw at Christmas for the first time since 2014​,​ have continued into 2017, with like-for-like inflation on a basket of everyday groceries climbing to 0.7​ per cent​.

Kantar ​Worldpanel ​said the increase would mean shoppers would find themselves around £27 worse off if prices continue to rise at the same rate for the rest of 2017.

Market share figures from rival analysts Nielsen also ha​d​ Aldi in fifth place at 7.2​ per cent.

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Nielsen's UK head of retailer and business insight, Mike Watkins, said: "We anticipate the industry to grow around 2​ per cent​ this year, an improvement on 2016, primarily due to the return of cost price inflation after three years of deflation and the depreciation of sterling - yet grocery spend remaining robust despite price rises.

"The discounters will continue to grow faster than this due to the acceleration of new store openings which could push their market share to 13​ per cent​ for the first time ever."