Sainsbury’s Returns To Growth But Big Four Continue To Lose Market Share
Latest grocery market data from Kantar shows year-on-year supermarket rose 0.7% over the 12 weeks to 23 February, the fastest rate of growth since November last year. The pick-up in performance will be welcomed across the sector after a difficult Christmas trading period. However, the traditional large grocers are still struggling to find a way to halt their declining market shares up against the fast-growing discounters.
Sainsbury’s was the only one of the Big Four grocers to increase year-on-year sales, with spend up by 0.3% – its first growth since October 2019. Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Sainsbury’s has performed well this period despite a challenging market, growing sales in its Sainsbury’s Local convenience stores as well as online. It’s worth noting, however, that continued pressure from the discount retailers meant the retailer still lost market share this month.”
Meanwhile, sales at Tesco and Asda fell by 0.8% and 1.2% respectively. Morrisons remained the worst performer amongst the Big Four with its sales slipping 2.0% and market share falling from 10.4% to 10.2%.
Buoyed by strong performance over the Valentine’s trading period, Lidl took the crown as Britain’s fastest-growing grocer for the first time since November 2017, with sales up by 11.4%. McKevitt commented: “Lidl has been benefiting from its store expansion programme for a number of years, hitting a landmark in February by opening its 800th British store. The new locations have helped to bring in nearly 900,000 additional shoppers to the supermarket this period, and its proportion of market sales has increased from 5.2% last year to 5.8%.”
Aldi’s sales were up by 5.7%, with its share of the market growing to 7.9%. The discounter was particularly strong in both alcohol, up by 7%, and chilled convenience items – such as dips and prepared salads – which grew by 8%.
With Waitrose preparing to take full control of its own online distribution when its partnership with Ocado comes to an end in September, Kantar suggested that the key to the chain’s success will be translating its premium brand to the online experience. McKevitt said: “Waitrose currently only commands 5.1% of the market, with sales declining by 1.3%, but is the market leader in shopper satisfaction [based on recent Kantar research]. Nearly four times more people report a good experience shopping with Waitrose than a negative one. Satisfaction with in-store staff is particularly high, and capturing that trademark service will be crucial as it grows its online platform this year.”
The Co-op continued its robust performance with shoppers on average making one additional trip to the grocer over the period, in contrast to the overall market where frequency fell. The convenience retailer saw sales grow by 2.5% year-on-year and its market share increase to 6.0%.
Ocado continued its double-digit growth at 10.8%, while Iceland’s sales increased by 1.7% and its market share remained flat at 2.2%.
Meanwhile, Kantar’s data also showed that consumers are taking steps to ward off the coronavirus. Sales of hand sanitiser increased by 255% in February, while other kinds of liquid soaps saw sales increase by 7%, and 10% more was spent on household cleaners.
NAM Implications:
- Given the mults YOY changes continue to appear like little more than rounding errors…
- …compared with Lidl’s 11.4% and Aldi’s 5.4%…
- …there is only one way this market is headed medium and longer term.
- To be precise: growth of the discounter market share at the expense of the mults…
- The key issue becomes: how long before our mults-based organisation structures…
- …are completely out of line with market realities?
- Time for a really fundamental rethink of where the discounters (and Amazon) figure in your trade strategies…
