Sales Growth At Leading Supermarkets Accelerates As Grocery Inflation Hits Four Year High

14th November 2017

Latest grocery market share figures from Kantar Worldpanel, for the 12 weeks to 5 November 2017, show sales in the supermarket sector have increased in value by 3.2% year-on-year heading into the all-important Christmas trading period. However, volume sales increased by less than 1%, meaning it’s price rises keeping performance buoyant.

The market researcher’s own data showed that like-for-like grocery inflation now stands at 3.4% – its highest level since November 2013. Prices are rising fastest in markets such as butter, fish and cola and are falling in only a few markets, including crisps and fresh poultry.

Consumers appear to be starting their Christmas shopping early to spread the cost this year, encouraged by the flurry of festive adverts from the grocers in recent weeks. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel Fraser McKevitt, commented: “Consumers have already been digging deep in preparation for the holiday season, buying 10.1 million packs of traditional Christmas biscuits in October alone. Alcohol sales have ramped up too, increasing by 5.3% year on year as shoppers parted with an extra £142m on their favourite tipples. The British public is only just getting started when it comes to Christmas shopping, and is expected to shell out a whopping £28.7bn at the grocers in the final 12 weeks of 2017.”

Lidl was the UK’s fastest growing supermarket for the fifth consecutive period, with sales up 15.1% – boosted by new store openings. Some 10.6 million households visited Lidl at least once during the past three months, boosting the grocer’s market share by 0.5 percentage points to 5.1%. Sales at Aldi – which attracted 11.9 million households during the same period – increased by 13.1%, advancing the retailer’s market share to 6.7%.

Meanwhile, Sainsbury’s grew sales by 2.6%, attracting an additional 364,000 shoppers to become the fastest growing among the big four for the first time since April 2016. McKevitt explained: “Brands were the fastest-selling products at Sainsbury’s during the past 12 weeks – particularly in soft drinks and dairy – flying in the face of the market’s focus on own label lines. The grocer’s strongest growth came from both its Local convenience stores and online sales. Despite a positive quarter, Sainsbury’s market share fell back by 0.1 percentage points year on year to stand at 16.2%.”

Tesco welcomed 76% of British households during the past 12 weeks, growing sales by 2.3%. However, its market share was still down 0.2 percentage points on last year, to 28.0%.  Morrisons saw sales increase by 2.1%, accompanied by a marginal fall in share – from 10.5% last year to 10.4% during the latest quarter.

Asda enjoyed its eighth consecutive period of growth – the longest run of sales increases the retailer has seen since March 2014. McKevitt commented: “Both cheaper and more premium own label lines delivered an impressive performance to help increase overall sales by 1.5% year on year. Asda’s budget Farm Stores range grew by 88%, while sales of its Extra Special line were up 22%. The grocer will be looking to build on this growth over Christmas and well into the new year.”

Sales at Iceland increased by 1.1%, with share falling slightly to 2.0% – down from 2.1% last year. Nearly half of the retailer’s growth came from categories outside its core frozen ranges, such as alcohol, which grew by 23% thanks to increased listings of wine, lager and cider.

McKevitt continued: “Amid news that Nisa’s shareholders have backed Co-op’s takeover of the group, there is plenty of room for growth: convenience stores in all their forms currently account for 12.1% of grocery sales. Nearly 60% of UK households currently visit this type of retailer, spending £3.2bn in smaller stores during the past 12 weeks. Co-op is already the nation’s most frequently visited grocer – shoppers pop in almost twice a week on average – despite having seen sales fall by 1.5% compared to the same period last year.”

Meanwhile, Waitrose held its market share steady year on year at 5.3%, seeing sales growth across the board, from convenience stores, larger supermarkets and online. Ocado increased sales by 6.8%, growing ahead of the overall online grocery market.