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Alliance News


Heavy Discounters Up Pressure On The UK's Big Four Supermarkets

Tue, 3rd Jun 2014 11:45


LONDON (Alliance News) - The UK's biggest four supermarket chains continue to face pressure from the heavy supermarket discounters Aldi and Lidl, while a slowdown in the UK grocery market hit its lowest level for more than 11 years, as the supermarket price war and the "pricing race to the bottom" continues to dominate the UK grocery sector.

According to the latest grocery share figures from Kantar Worldpanel, out of the UK's four biggest supermarket chains, Tesco PLC, J Sainsbury PLC and Wm Morrison Supermarkets PLC all reported market share declines in the 12 weeks ending May 25, while US Walmart-owned Asda was the only large grocer to grow its share year-on-year during the period.

Upmarket supermarket chain Waitrose however, continues to see growth in sales and market share.

"At Waitrose, managing director Mark Price?s tactic of being "everything that the discounters aren?t" seems to have paid off for the retailer," said Edward Garner, Director at Kantar Worldpanel.

Garner said that by differentiating its offering, Waitrose has maintained its all-time record share of 5.1% secured last period.

Meanwhile, Walmart-owned Asda surpassed its rivals with a market-beating growth of 2.4%, lifting market share to 17.1%, compared with 17.0% a year ago.

Tesco, Sainsbury?s and Morrisons have all lost market share since the same period last year, while Tesco and Morrisons recorded sales drops of 3.1% and 3.9%, respectively.

Whilst Tesco, Sainsbury and Morrisons have all seen their market share drop, Sainsbury's is the only supermarket chain out of the three to have seen sales growth in the period, as it continues to slightly outperform its rivals.

"Despite the wider market slowing, Lidl achieved a record share of 3.6% this period, accelerating with its highest ever year-on-year growth of 22.7%. Similarly, Aldi has gained 35.9% and retains its record 4.7% share reached last period," said Garner.

The supermarket price competition in the UK grocery sector prompted another drop in the level of grocery price inflation to 1.2% for the 12 week period, the lowest level in four years, reflecting the impact of Aldi and Lidl and the market?s competitive response.

"The Kantar data represents a continuum of recent trends with the limited assortment discounters gaining share at a rapid rate whilst Tesco in particular looks to be the big loser," said Shore Capital Analyst, Clive Black.

Tesco is set to report its sales figures for the first quarter Wednesday, with analysts expecting continued weak sales figures from the UK and Europe.

By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty

Copyright 2014 Alliance News Limited. All Rights Reserved.

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