Upmarket shoppers flock to Morrisons

Analysts say Morrisons is attracting shoppers across the spectrum

Kantar said premium own label lines are seeing huge growth and Bradford-based Morrisons has been making the most of the premium sector’s popularity among consumers.

It said that Morrisons’ “The Best“ line is performing well following last year’s launch and is attracting more affluent shoppers through the grocer’s doors. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Morrisons is attracting customers across the spectrum, but we are seeing it attract more upmarket customers with the launch of ‘The Best’.

It’s about value. People are willing to pay higher prices as long as the product is really good. Morrisons is doing that although (CEO David) Potts has also fixed the basics. Morrisons is selling the right products at the right prices. It is attracting consumers who wouldn’t have shopped there before.”

Morrisons was the fastest growing big four grocer over the 12 weeks to April 23, with sales rising 2.2 per cent to £2.76bn.

Leeds-based Asda’s sales rose 0.8 per cent to £4.1bn, its first year-on-year sales increase since October 2014.

“Asda seems to be over the worst. Some of the growth is annualising against bad numbers last year, but Asda is attracting a quarter of a million additional customers so it’s doing something right,” said Mr McKevitt.

“However these better numbers don’t mean the discounters have gone away.”

Discounter Aldi saw sales rise 18.3 per cent while Lidl was close behind with sales increasing 17.8 per cent.

Aldi and Lidl achieved new record high markets shares of 6.9 per cent and 5 per cent respectively.

“Aldi and Lidl seem to be doing the right thing,” said Mr McKevitt.

“They are opening new stores which has helped sales to rise. Shoppers are shopping more frequently with them and people are picking up more items in their baskets.”

Kantar said that all 10 major grocers are in growth for the first time in three-and-a-half years, with the overall grocery market rising at 3.7 per cent over the 12 weeks to April 23.

Market leader Tesco returned to growth with sales up 1.9 per cent to £7.26bn over the quarter.

Number two player Sainsbury’s sales rose 1.7 per cent to £4.25bn, the biggest increase since June 2014.

Waitrose’s sales climbed 3.1 per cent to £1.36bn.

Kantar said that strong demand for Easter eggs helped supermarket sales rise at their fastest rate since September 2013.

British shoppers bought 20 million packets of hot cross buns in one week alone and splashed out £325m on Easter eggs, upping the average price they paid for an egg by 8.6 per cent to £1.65.

“All 10 major retailers are in growth for the first time in three-and-a-half years, when we last saw like-for-like grocery inflation as high as it is now,” said Mr McKevitt.

“While prices do look set to rise further, the current inflation rate of 2.6 per cent is still below the average level experienced by shoppers between 2010 and 2014.”

He said that it is inevitable that retailers will raise prices following the fall in sterling.

“Retailers have held off for some time, but (currency) hedges have expired and retailers are passing on higher prices,” he said.

“We think inflation will settle at around 3 per cent. It won’t be the double digit inflation we saw before although the political landscape could change.”