Slowest growth ever for supermarket sales

“Intense competition” and zero price inflation mean supermarket sales are growing at the slowest rate ever recorded, according to recent figures from Kantar Worldpanel.

Kantar’s figures for the 12 weeks ending 14 September 2014 show overall market growth of 0.3% for Britain’s grocery market, a 0.3% decrease on the British Retail Consortium’s most recent figures. This has been caused by “intense” competition between supermarkets and zero overall price inflation.

“Consumers are currently benefiting from intense price competition between the grocers. For the first time ever we’ve seen the average basket of everyday goods bought today costing exactly the same as it did a year ago,” explained Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

However, hard discounters Aldi and Lidl buck the trend, with recorded growth of 29.1% and 17.7% respectively. McKevitt said this showed that “shoppers still have a strong appetite for the discount stores”.

Asda was the only supermarket out of the Big Four – including Tesco, Morrisons and Sainsbury’s – with a 17.4% increase in market share. Meanwhile Waitrose also strengthened its market share to 5.1%. The report dellivers a further blow for Tesco which made headlines this week for overstating its half year products by £250 million.

Speaking at the Association of Independent Meat Suppliers annual conference, Dominic Morrey, director of fresh trading at wholesale firm Booker Group, said this provided an opportunity for suppliers to set up their own retail outlets. Morrey described how the big four supermarkets were struggling with a lack of identity, which opened up the market to butchers and farm shops that were “well-run and good quality, with good values and sincere”. He added: “If they try to become a halfway house, consumers will lose affinity with them.”

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