The market analyst’s share figures, published today for the 12 weeks ending May 24, 2015, show continued slow supermarket growth, with sales increasing by just 0.2% compared to a year ago.
Morrisons was the only one of the big four retailers to see increased sales in the latest period, although its market share remained unchanged at 10.9%.
“Morrisons has returned to growth for the first time since December 2013 with a marginal sales increase of 0.1% – a welcome boost for new ceo David Potts,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
“A committed core of loyal Morrisons consumers is responding positively to recent initiatives, and business has been boosted by online sales.
“Morrisons’ performance is an improvement on what was a difficult May 2014, so this is only the first step in any future recovery.”
Discounters Lidl and Aldi
Buoyed by sales growth of 8.8%, Lidl reached a record high market share of 3.9%, up from 3.6% last year, fuelled by more consumers visiting stores and shoppers buying more items, said McKevitt. That suggested a greater consumer willingness to shift to the discounters for bigger shopping trips. Aldi grew sales by 15.7% over the period, taking share to 5.4% of the market, according to Kantar.
Sainsbury had also held its share at 16.5%, despite sales falling by 0.3%, it said. After an improved start to the year, Tesco sales decreased by 1.3%, with its market share falling by 0.4 percentage points to 28.6%.
Strong performance from Tesco Express convenience stores and its online channel was not enough to balance falling sales in the larger outlets. Asda sales fell by 2.4% with lower prices charged at the till not sufficiently offset by increased footfall.
“All of the major supermarkets are finding growth difficult as prices have been declining since September 2014,” said McKevitt.
‘Prices will start rising’
“Yet while like-for-like groceries are 1.9% cheaper than this time last year this is not as steep a fall as last month, when prices were down by 2.1%. This means that if current trends continue, prices will once again start rising by the end of the year.”
As a result of sales growth of 1.6%, Waitrose increased market share to 5.2%. This was helped by a regional bias towards southern Britain, where grocery sales grew more quickly, particularly in London, said Kantar. Iceland Foods also returned to growth for the first time in a year in this period, increasing sales by 1.9%.
According to Edouard Aubin and Francois Halconruy, analysts at Morgan Stanley, the grocery market “remains anaemic”, although deflation was “easing marginally”. Prices fell 1.9% in May, versus April’s record drop of 2.1%.
“While the easing of inflation is a positive for the industry, we expect the UK grocery market to remain deflationary over the next 12 months,” they said. This was because, they believed, the price gap between the big four and the discounters remained unsustainably high.
Prices for the UK’s most popular grocery products fell more slowly than previous months, according to mySupermarket’s Groceries Tracker, which monitors the cost of the 35 most commonly bought grocery products.
Data from mySupermarket showed an average basket of products fell by just 0.10% to £86.60 in May compared to April, where the same basket would have cost shoppers £86.69.
This was a slower fall compared to the full 1% reduction in prices in March, although consumers benefited, with May’s basket of groceries £5.46, or 6%, cheaper compared to May 2014.
Shore Capital director of research Clive Black said the stabilisation of deflation and a return to growth in grocery volume sales were “crumbs of comfort” within the Kantar Worldpanel data.
He stressed that the big grocery retailers had scaled back on store expansion programmes, while the discounters were opening numerous stores, so that could negatively skew supermarket performance.