Grocery price deflation hits supermarket sales

07 May, 2015
Supermarkets

Supermarket sales growth slows in 12 weeks to April

Supermarket sales have slowed to a revenue growth of 0.2% compared to last year, according to the latest figures from Kantar Worldpanel. 

The figures for the 12 weeks ending 26 April 2015 showed the effects of grocery price deflation with a typical basket of everyday items now 2.1% cheaper than it was in 2014. Lower costs are the result of both falling commodity prices and the ongoing supermarket price war.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Growth in the market has declined, thanks to a record low for grocery price deflation. Lower costs are the result of both falling commodity prices and the ongoing supermarket price war, with all the major retailers offering cheaper like-for-like goods.

“This is good news for consumers, saving the average household £20 in the last three months. But many of the country’s largest grocers have struggled to enjoy substantial growth, with lower prices taking £532m out of supermarket tills.”

Overview

Sainsbury’s was the strongest performer of the Big Four despite a 0.2% fall in sales. Growing slightly behind the market, its share now stands at 16.5%, down 0.1 percentage points on last year. Its performance has been helped by its focus on non-food items and the chain’s strength in London, where grocery sales are growing faster than elsewhere.

German discounters Aldi and Lidl continued to be the fastest-growing retailers, up by 15.1% and 10.1% respectively, while market share was 5.4% for Aldi and 3.8% for Lidl. However, growth is slowing in this quarter. Waitrose was the only other supermarket to see an increase in sales, up 1.5%.

Sales at Morrisons declined by 1.1% on a year ago, while at Tesco they fell back by 1%, taking market share to 28.4% – a decline of 0.4 percentage points compared to a year ago. The Co-operative saw sales fall by 1%, but did slightly increase footfall, as the business tried to exit larger-format supermarkets to concentrate on its convenience business.





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