Discount and premium supermarkets recorded the strongest growth of grocery market share in the 12 weeks ended December 23rd 2012, new data released today reveals, highlighting the polarisation of the market.
Upmarket grocer Waitrose, which last week announced sales of £300 million over the festive period, achieved growth of 5.4 per cent while discounters Aldi and Lidl saw growth of 30.1 per cent and 10.8 per cent respectively.
Meanwhile, frozen food specialist Iceland increased its share to 2.2 per cent, a 12-year high for the chain, according to the latest figures from consumer insights firm Kantar Worldpanel.
Edward Garner, Director at Kantar, said of the figures: “Historically, the discounter sector has seen its share dip at Christmas as shoppers treat themselves and trade up, but the all-time record share of 3.2 per cent for Aldi is a sign of the times and shows that this is no longer the case.
“Aldi and Lidl both benefitted from carrying items such as goose, venison and fine wines in their pre-Christmas catalogues this year.
“It seems that offering premium products at budget prices has paid off for the discount retailers.
“The polarisation of the market is highlighted by consumer spend levels which were widely anticipated to drop this year.
“While 47 per cent of shoppers did reduce their spend in the lead up to Christmas, 48 per cent of shoppers increased their spend by 4.5 per cent (the rate of inflation) showing that ‘two nations’ continues to be a key feature of the grocery market.”
Overall, the grocery market grew at 3.2 per cent, the same as the previous period, while the measure of grocery price inflation has risen sharply to 4.5 per cent, which the company warned is likely to pile pressure on household budgets across Britain.
Of the big four supermarkets, Sainsbury’s has fared best, increasing its share from 17 per cent over the same period in 2011 to 17.1 per cent, while competitors Tesco, Asda and Morrisons reported decreases.
Following a turbulent year, Tesco’s saw an improvement in its performance compared with the rest of the year and its market share has slipped 0.1 per cent to 30.5 per cent, while Asda’s share dropped 0.2 per cent to 17.3 per cent.
Morrisons saw its share fall 0.4 per cent to 12 per cent, emphasising the ongoing struggles facing the grocer as it seeks to modernise its offering.
Yesterday, the supermarket announced a total sales decline of 0.9 per cent over the Christmas period as like-for-likes dropped 2.5 per cent and Garner believes that these latest figures must serve as a warning to the grocer.
“The well-publicised under-performance of Morrisons continues and it is the only big four supermarket to lose sales compared with last year,” he explained.
“This highlights its need to address the lack of convenience outlets and an online offering in 2013, as already clearly identified by the retailer.”