29th Jul 2014 09:19
LONDON (Alliance News) - The UK's big-four supermarket chains continue to face pressure from heavy discounters and upmarket grocers, but while J Sainsbury PLC and Asda have maintained market share and sales, Tesco PLC and Wm Morrison Supermarkets PLC are seeing drops in both, according to the latest figures from Kantar Worldpanel.
Morrisons and Tesco both recorded sales drops of 3.8% in the 12 weeks to July 20 from the same period a year earlier, and also saw a dip in their market shares. Morrisons' market share fell to 11.0% from 11.5% last year, while Tesco's market share declined to 28.9% from 30.3% a year before.
In contrast, both Sainsbury's and Asda continue to outperform the other two, posting growth in sales in the 12 week period and managing to maintain market share. Sainsbury's sales rose 1.2% year-on-year, and its market share remained level at 16.6%, compared to a year before.
Meanwhile, Asda, owned by US retail giant Wal-Mart Stores Inc, saw sales growth of 0.9% in the period, and maintained its market share at 17.0%.
Recent sales and market share figures have shown mixed fortunes for the big four, as pressure from heavy supermarket discounters such as Aldi and Lidl have hit Tesco and Morrisons the hardest.
The four big players are being squeezed between Aldi and Lidl at the bottom end of the market and Waitrose and Marks & Spencer Group PLC at the premium end.
Aldi?s 32% growth rate in the recent period on a year before has lifted its market share to 4.8%, according to Kantar, a new record UK share for the retailer. Similarly, Lidl sales have grown by nearly 20% year-on-year, whilst holding onto its own record share of 3.6%.
Both discount retailers have recently announced impressive expansion plans. Aldi will aim to double its store numbers to 1,000 by 2021, while Lidl is seeking to boost its presence with an eventual total of 1,500 outlets.
At the other end of the scale, upmarket grocer Waitrose, part of the John Lewis Partnership, continues to see growth in sales and market share.
"Waitrose has continued to resist pressure from the competition, testament to its policy of maximum differentiation, and has grown sales by 3.4%. This figure is well above the market average and thereby has lifted its market share," said Kantar Worldpanel Director Edward Garner in a statement.
The supermarket price competition in the UK grocery sector prompted another drop in the level of grocery price inflation to 0.4% for the 12 week period, compared to 0.8% in the previous quarterly report, according to Kantar, reflecting the impact of Aldi and Lidl and the market?s competitive response.
"Competitive pricing among the big grocers and deflation in the price of staple items...has driven inflation to the lowest level since October 2006 when Kantar Worldpanel began this measure. As a result, market growth has fallen to 0.9%, the lowest figure for 10 years", Kantar Worldpanel said.
Tesco shares were flat at 268.50 pence Tuesday morning, with Morrisons down 0.7% at 171.06 pence. Sainsbury's shares were up 0.3% at 320.80 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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