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Consumers reap the rewards of cheaper goods

04/05/2016

The latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 24 April 2016, show all the major supermarkets posting a decline in their rate of growth as supermarket sales increased by only 0.1% on this time last year. This is a slowdown from the 1.1% reported in April, which was boosted by an early Easter.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “Consumers are enjoying a golden period of cheaper groceries with like-for-like prices falling every month since September 2014. Nearly two years of falling prices mean the average household is spending £78.10 a week in the supermarket, so consumers have annually saved more than £400 than if prices had risen at the same rate as the last decade.
“Yet lower prices are not the result of more groceries being bought on promotion. In fact promotional levels fell in the last year – in the past 12 weeks 38.5% of spend was on promoted goods, a decline from the 39.8% last April. Retailers are aiming for simplicity in their pricing and only a quarter of promotional spend is now through multibuy deals – a 24% drop on last year. This change has been evident across every grocer but most notably in Sainsbury’s, where only 7% of deals are now multibuys. Straight price cut deals tend to offer greater discounts so shoppers will see these as a welcome benefit across the market.”
The overall market volume growth of 1% is in line with Britain’s increased population. Fraser McKevitt continues: “Individual households have stopped increasing the amount of groceries they buy and while it is tempting to correlate lower volumes with the uncertainty surrounding the EU referendum there is no evidence that supermarket purchasing has any significant link with consumer confidence.”
Against the difficult market backdrop the Co-operative’s renaissance continues, growing sales by 3.3% year-on-year. Its market share has risen to 6.2% as refurbished stores and an improvement in range has meant shoppers are visiting more frequently and spending more per trip.
Waitrose also gained market share this period, up by 0.1 percentage points to 5.2% on the back of 1.5% sales growth. It was a different picture for the biggest retailers, as Fraser McKevitt notes: “Sainsbury’s was the best performing, though sales fell back by 0.4% – the first time the retailer has dipped into decline since July last year, though it retained its 16.5% share of the market. This marks the first time that each of the big four has simultaneously witnessed a drop in sales since April 2015.”
Morrisons is still feeling the impact of having less store space than last year – this period sales were down by 2.6%. Sales were also down at Tesco, by 1.3%, and at Asda, which now commands a 16% share of the market thanks to a sales fall of 5.1%.
The discounters have maintained the record share high of 10.4% which they first reached last month. Lidl was the fastest growing with sales up by 15.4% as shopper numbers increased by 648,000. At Aldi sales were up by 12.5% as the discounter added an additional 732,000 shoppers in the last 12 weeks – more than any other retailer.

An update on inflation
Grocery inflation now stands at -1.5%* for the 12 week period ending 24 April 2016. This means shoppers are now paying less for a representative basket of groceries than they did in 2015. This is the 21st consecutive period of grocery price deflation. Falling prices reflect the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories such as fresh and processed pork, butter, and crisps.
*This figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by shoppers and therefore represents the most authoritative figure currently available. It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods – shoppers are likely to achieve a lower personal inflation rate if they trade down or seek out more offers.
Kantar Worldpanel’s data visualisation tool allows you to view and analyse Grocery Market Share data online. The latest sales share figures for all of the major grocers can be viewed and compared with historical figures here and all graphics within the Kantar Worldpanel dataviz are available to embed in your site. (Optimal viewing in recent versions of Internet Explorer or Chrome)

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Fraser McKevitt

Head of Retail and Consumer Insight

 

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