TOP NEWS: Valentine's Day And Brexit Stockpile Help UK Groceries Sales

LONDON (Alliance News) - The UK grocery market saw marginal growth in the past three months, helped by Valentine's Day, while some shoppers have also started stockpiling food to prepare for a no-deal Brexit, according to survey by Kantar Worldpanel published on Tuesday.

In the 12 weeks to February 24, supermarket sales grew by 1.9% over a year before, Kantar said, as Brexit uncertainty intensified and some customers started their preparations for a "disorderly exit".

"It's worth noting that hard-to-stockpile fresh and chilled foods made up 39% of the value of the average British shopping basket," said Fraser McKevitt, head of Retail & Consumer Insight at Kantar Worldpanel.

Asda and J Sainsbury PLC now have a potential combined market share of 31.2% as the companies await the final UK Competition & Markets Authority's final ruling on the proposed merger, Kantar noted.

The two UK supermarkets announced the intention to merge in a GBP14 billion deal back in April, with Asda currently owned by US retailing giant Walmart Inc. However, the CMA late last month threw the planned tie-up into doubt.

The competition regulator said it found "extensive" concerns over their merger, warning it could lead to higher prices and reduce quality and choice for shoppers across the UK. In its provisional findings of its in-depth probe, the CMA said it would be "difficult for the companies to address the concerns it has identified".

Despite the possible distraction, "Asda continued its run of uninterrupted growth since April 2017, increasing sales by 1.0%," said McKevitt.

According to Kantar, Asda's own label lines continued to outperform brands and an increase in the number of customers shopping online helped boost growth overall.

Meanwhile, Sainsbury's sales fell by 1.0%, reducing its market share by 0.5 percentage point to 15.7%. Despite that, Kantar highlighted, Sainsbury's premium Taste the Difference range proved popular, as sales of this range of products rose by 4%.

The UK's largest grocer, Tesco PLC, achieved growth of 1.3%, helped by customers buying 2% more items on each visit. Overall, Tesco's market share fell by 0.2 percentage point to 27.7%.

WM Morrison Supermarkets PLC's market share dropped slightly to 10.5%, while sales were up 0.8%. Kantar noted that Morrisons sells 43% of its goods on a higher promotion than any other supermarket.

As Ocado's new partnership with Marks & Spencer Group PLC was confirmed last week, sales at the online specialist rose by 3.4% during the recent 12 weeks, holding market share at 1.2%, Kantar said.

On Wednesday last week, Ocado and M&S entered into 50-50 joint venture, trading as Ocado.com, which will combine M&S's branded food and beverage range with Ocado's own label and third party products.

Aldi was the only retailer to report double-digit growth during the past 12 weeks, increasing sales by 10.0%. Kantar said 10% of the UK population bought chocolate, wine, steak, shellfish or a chilled dessert from Aldi during the week of Valentine's Day, helping it increase market share by 0.6 percentage points to 7.6%.

Lidl's sales were up 5.4%, increasing its market share by 0.1 percentage point to 5.2%.

Waitrose reported growth of 1.0%, its strongest performance since August 2018.

UK grocery inflation for the period was negative 1.7%, Kantar said, with shoppers now paying less for a representative basket of groceries than they did in 2014. Falling prices reflect the impact of Aldi and Lidl and the market's competitive response, as well as deflation in some major categories including eggs, butter, bread, crisps and fresh poultry.