Friday, December 14, 2018

New figures: Morrisons falls fastest as Aldi and Lidl drive forward


Market decline at Morrisons has accelerated as Aldi, Lidl and Farm Foods made inroads in the fundamentally shifting UK grocery market.

All big four supermarkets lost market share, with Morrisons the biggest casualty (-3.8 per cent) for the 12 weeks to 30 March 2014. Asda was the most resilient, losing just 0.5 per cent share, according to insights firm Kantar.

“Amid a challenging market backdrop, individual retailer growth might be expected to be restricted. This is certainly not the case for Aldi which achieved its highest ever growth of 35.3%, boosting the retailer to a record market share of 4.6%,” commented Edward Garner, director at Kantar Worldpanel. “Lidl also experienced strong growth in a record breaking month, and now accounts for 3.4% of the market.”

Tesco, who lost 3 per cent of the market to 28.6 per cent, have slashed the price of four pints of milk, a 6 pack of free range eggs and 250g of butter to just £1 in response to discounter pressure while Morrisons will spend £1bn on a three-year campaign of price cuts after posting a huge fall in profits last month.

Tesco boss Philip Clarke who has described some of the actions of the hard discounters as “uneconomic” has set a 5.2 per cent as a gross margin target.

Consumer price inflation, which recently fell to a four year low of 1.7 per cent, is thought to have been driven down by retailers‘ marked discounting.

Waitrose, which will open its first ever national distribution centre next summer, continues to hold on to its record 5 per cent share reached last period, while The Co-operative appears to have stemmed its share losses, managing to hold its current 6.1 per cent share over the past 48 weeks.

Clive Black, head of research at analysts Shore Capital said the earnings outlook for UK listed supermarkets appeared highly constrained.

“We have harboured growing concerns about the scope for price cutting to gain ground in recent months, so potentially debilitating supermarkets‘ gross margins in what are demonstrably weak markets in terms of demand in the UK”, he said.


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