Grocery market slips into decline for the first time since January

Latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 19 June 2016 have shown the market has slipped into decline for the first time since January. Supermarket sales fell by 0.2%, while like-for-like grocery prices declined by 1.4% on last year. 

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said that the decline is a continuation of slow supermarket sector growth dating back to 2014. This is primarily a result of cheaper everyday groceries brought about by a grocery “price war”.

“While these latest figures predate the EU referendum result, the immediate economic uncertainty is unlikely to cause a substantial fall in grocery volumes, as demonstrated by the 2008 financial crisis when basic food, drinks and household sales proved resilient,” said McKevitt.

“With an estimated 40% of the food we consume sourced from overseas, any long term change in exchange rates may threaten the current period of cheaper groceries. Historically, higher prices have led to consumers looking for less expensive alternatives such as own-label products, seeking out brands on promotion or visiting cheaper retailers.”

Meanwhile, the market share of the discounters has hit a record high. The combined share of Lidl and Aldi reached 10.5%, at 4.4% and 6.1% respectively. According to data, almost three fifths of Britons, or 58%, visited one of the two retailers in the past 12 weeks with Lidl increasing sales by 13.8% and Aldi by 11.5% on a year ago.

Smaller retailers have also performed well.

“It’s been a good period for the smaller retailers,” commented McKevitt. “Co-op’s growth of 2% has cemented its recent revival, heralding a full year of increasing sales. Meanwhile, at Waitrose, small but rapidly increasing sales of its premium Waitrose 1 brand have helped the retailer grow by 1.3%. Waitrose has now had an unbroken period of growth dating back to 2009 – the best run of any retailer outside of the discounters.”

Meanwhile, the larger retailers’ performance continued on its path downhill. Overall sales at Tesco dropped by 1.3%, with Morrisons’ sales falling by 2.4%, reflecting the ongoing impact of the disposal of stores. Sales fell by 1.4% at Sainsbury’s, while Asda saw sales down by 5.9%. Each of the big four lost market share on the previous year.

Want more stories like this in your inbox?

Sign up for our FREE email newsletter


User Login



Most read


Should the meat industry pay for compulsory abattoir CCTV monitoring?