Tesco meat volume sales outperform value

Supermarkets’ premium own-label brands have experienced a strong performance in the run-up to Christmas. 

According to the latest grocery market share figures from Kantar Worldpanel, published for the 12 weeks ending 4 December 2016, consumers are spending 13% more on premium lines than they did last year. This is taking place against a backdrop of continued slow growth for supermarkets, which have seen an overall year-on-year sales increase of just 0.7%.

Supermarket giant Tesco has seen a solid performance in its meat sector, although the amount sold outweighed value sales. “Tesco’s volume sales are growing faster than its value sales, particularly in the meat and fresh produce categories,” explained Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

“Its value sales remain ahead of the market, increasing by 1.6% year on year as the retailer grew its market share to 28.3%. Sales at Sainsbury’s fell by 0.6%, with market share down 0.2 percentage points to 16.5%, while Asda saw sales fall by 4.7% at a marginally slower rate in recent months. Reflecting a smaller store estate, Morrisons’ overall sales declined by 1.4%, but the retailer saw particularly strong performance online – recording its highest ever sales in that channel.”

According to Kantar, the only retailer to record double-digit sales growth for the time period was Aldi, with its premium Extra Special brand helping the supermarket increase sales by 10% year on year. This helped its market share to rise by 0.6 percentage points to 6.2%.

Iceland experienced the second-best performance, with an 8.6% sales uplift adding to a 0.2 percentage point increase, taking the store’s market share to 2.2%.

Discounter Lidl saw a 5.7% increase, Co-op a 2% and Waitrose a 1.1% increase year on year.

“Top-tier private label finds its way into 12% of shopping trips, with 88% of consumers now buying from these lines,” added McKevitt. “In the past 12 weeks, 6.3% of own-label purchases were from premium lines such as Tesco Finest and Sainsbury’s Taste the Difference, well ahead of the 5.7% recorded last year. We’ve seen particularly impressive performances from Morrisons’ The Best, which saw sales increase by 35%, and Asda Extra Special which grew up 15%. Over Christmas it’s likely that premium lines will record their highest-ever sales figures as even more shoppers trade up to treat their loved ones.”

McKevitt added that despite anticipation of higher prices, consumers have not yet felt the effects of rising inflation, with a typical basket of everyday groceries 0.1% cheaper that this time last year.
 
“However, some categories are beginning to see prices increase, with fresh fish up 5.3% year on year, chilled ready meals up 2.3% and beer up 2.1%,” explained McKevitt.

“Prices are still falling overall, despite shoppers now spending less on promoted items than they did this time last year. Some 36.9% of spending was on offers during the past 12 weeks, down from nearly 40% in the 12 weeks to December 2015. Promotional activity has dipped across all five of the biggest retailers, reflecting ongoing efforts to simplify shopping and offer more of an everyday low pricing model, which relies far less heavily on promotions.”

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