1st Jun 2016 07:39
LONDON (Alliance News) - Tesco PLC overtook rival J Sainsbury PLC to become the supermarket with the slowest sales decline among the big four UK grocers, in the latest sales data released by Kantar Worldpanel on Wednesday.
In the 12 weeks ended May 22, UK supermarket sales rose by just 0.1% year-on-year, the same rise Kantar reported in the preceding 12-week period, although Kantar said this was a positive performance for the overall market, as food price deflation remains at 1.5%.
Tesco posted the slowest sales decline out of the big four supermarkets, as sales fell by 1.0% in the period and its market share slipped to 28.3% from 28.6%. Kantar Director Edward Garner said this showed signs of stabilisation in comparison to the "historic declines" that the UK's biggest retailer has faced over the past two years.
Sainsbury's, which until last month had been posting consistent periods of sales growth, saw its sales fall by 1.2% in the latest 12 week period, falling behind Tesco for the first time in months, as its market share also slipped to 16.2% from 16.5%. Garner said this was due to a decline in multi-pack sales, as the supermarket shifts its promotional emphasis from multi-pack deals to straightforward price cuts.
Wm Morrison Supermarkets PLC followed in third place with a sales decline of 2.1%, while its market share decreased to 10.7% from 10.9%. Garner said Morrisons is still feeling the impact of store disposals.
But the worst performer was Wal-Mart Stores Inc-owned Asda Ltd, which saw its sales fall by 5.1% and its market share drop to 15.8% from 16.6%.
Discounters Aldi and Lidl, meanwhile, continued to achieve good sales growth. Aldi's sales grew by 11.4%, and Lidl's sales were up by 14.2%. Their combined market share increased to 10.4% from 9.3%.
Upmarket grocer Waitrose also saw its sales rise by 2.1%, as its market share increased slightly to 5.3% from 5.2%, while the Co-operative achieved 3.3% sales growth and its market share rose to 6.2% from 6.0%.
"While the big four are struggling to keep their market share what's clear is that consumers aren't flocking away from their stores ? their combined shopper numbers have dropped only 0.2% in the latest 12 weeks. In fact, 94% of Aldi and Lidl shoppers still visit at least one of the four major retailers every four weeks," Garner said.
"However, consumers' spend is increasingly being shared with other growing outlets which also include Waitrose, the Co-operative and Iceland, and average household spend for the big four has dropped by 2.9%," Garner added.
UK grocery deflation continues at 1.5%, meaning shoppers are now paying less for a representative basket of groceries than they did in 2015, Kantar said. This is the 22nd consecutive period of grocery price deflation, with falling prices reflecting the impact of Aldi and Lidl and the market's competitive response, as well as deflation in some major categories such as pork, poultry, butter, eggs and vegetables.
Separately Wednesday, the British Retail Consortium said its latest survey showed shop prices in the UK continued to fall in May, tumbling 1.8% on year. That follows a 1.7% decline in April. Non-food deflation was 2.7%, slowing from 2.9% in April, while fresh food prices slid 0.8%, versus 0.5% in April.
"The fact that today's figures remain deflationary doesn't come as a great surprise. We've experienced a record run of falling shop prices and, for the time being, there's little to suggest that'll end any time soon," said Helen Dickinson, BRC chief executive.
Shares in Tesco were trading up 0.3% at 165.65 pence on Wednesday, while Sainsbury's shares were down 1.5% at 264.50p and Morrisons shares were down 1.0% at 196.30p.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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