PRICE NOW CLEARLY DRIVING SHARES
(PLUS AN UPDATE ON GROCERY PRICE INFLATION)
Ed Garner, Director of Research, TNS Worldpanel, comments:
The latest TNS Worldpanel grocery market share figures, published today for the 12 weeks ending 10th August 2008 are showing the clearest picture yet that retailers with a clear price message are posting the strongest performances.
Total Grocers grew turnover by 7.2% compared with last year which is clearly better than many non-grocery sectors although this apparent buoyancy is largely reflecting inflation with volumes effectively static.
Both Aldi and Lidl show strong growth of 19.8% and 12.3% respectively. In the case of Aldi, this translated into a new record share of 3.0%. It is worth noting that this growth is entirely driven by new stores and new shoppers – spend levels for existing shoppers remain unchanged and quite low compared with the Top 4 (Typical monthly spend per household is £45 for Aldi compared with £126 for Tesco). Also several commentators have stated that “the middle classes are flocking to the discounters”. In fact, new discount shoppers are predominantly younger households with children which is more logical – their budgets will have come under strongest pressure.
The Iceland growth of 14.4% is the strongest for several years and reflects its discount message.
For the Top 4, performance continues in line with recent periods: Asda and Morrisons have grown ahead of the market and therefore seen share increases whereas the Tesco and Sainsbury growths of 6.5% and 5.3% respectively are behind the total market.
The Waitrose growth of 4.0% is lower than historical performance and this has caused a small share erosion of 0.1% - perhaps unsurprising given the way low price has dominated the current agenda.
An update on inflation
Price inflation in Grocery increased to 6.8% for the 12 weeks ending July 13th 2008 compared to the same period a year ago.
This figure is based on 78,000 identical products compared year-on-year in the proportions purchased by British shoppers and therefore represents the most authoritative figure currently available.