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Grocery market grows below inflation

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The UK grocery market grew below inflation in the 12 weeks to November 25th 2012, according to new figures released today, highlighting the increasing pressures on household budgets.

Growing at 3.2 per cent over the period, in line with the average over the past eight months, the overall grocery market grew below the 3.5 per cent inflation rate as shoppers avoid unnecessary spend ahead of the Christmas rush.

According to data from Kantar Worldpanel, of the big four supermarkets, Sainsbury’s beat competitors with year-on-year market growth of 4.7 per cent, building its share from 16.7 per cent in 2011 to 16.9 per cent, aided by its official sponsorship of the summer’s Paralympic Games.

While the other big three have reported losses in recent months, discounters continue to improve their standing as consumers search for cheap alternatives to everyday items.

Kantar Worldpanel’s Director Edward Garner said: “The strong performances from Waitrose, Iceland, Aldi and Lidl continue to be a key feature of the grocery market.

“In particular, the advance of Aldi continues unabated and its 27.3 per cent growth is being built on a solid foundation with 10 per cent more shoppers than a year ago and 17 per cent growth in the value of each shopping basket.”

Aldi, which last month announced the launch of a ‘super premium’ wine range, is maintaining its focus on growth and intends to open 40 new stores over the course of next year, taking its total stores to over 500.

Concentrating on a smaller high street format, the grocer hopes to grow within the burgeoning convenience market to further cement its success.

While a vast majority of leading grocers follow a multichannel strategy to entice busy shoppers via online offers, Garner notes that Morrisons’ conspicuous absence from the digital space is affecting its market share.

He explained: “Share losses are particularly acute for Morrisons which has experienced a sales decline of 1.1 per cent, bringing its share down from 12.3 per cent a year ago to 11.7 per cent now.

“The online grocery channel is currently growing at nearly 20 per cent per annum, and Morrisons’ absence from this channel will be holding it back.

“However, it is expected that online wine sales via Morrisons Cellar will make a start on addressing this.”

Published on Tuesday 04 December by Editorial Assistant

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