Food discounters fail to earn loyalty of converts

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By: Wise Marketer Staff |

Posted on September 11, 2009

Food discounters fail to earn loyalty of converts

The TNS Worldpanel UK grocery market share figures for the 12 weeks ending 9th August 2009, have confirmed the strong performance seen in recent periods for Waitrose.

In terms of growth Waitrose is the top performer at the moment, with growth of 10.2% (well ahead of the grocery market average of 5.6%). According to Ed Garner, director for TNS Worldpanel, two factors have contributed to this growth: the successful introduction of the 'Essentials' private-label range, and the completed conversion of stores acquired in the co-operative takeover of Somerfield.

Conversely, the discounter supermarkets have seen their growth fall. Year-on-year growth of 8.1% for Aldi and 6.3% for Lidl are still ahead of the market average, but this is a long way from Aldi's growth of 26% at the end of 2008.

TNS argues that, despite the continuing recession, the new shoppers attracted to these cheaper outlets and their low prices have largely failed to convert into regular loyal customers.

Looking at the top four UK supermarkets, the situation is very much unchanged, with Asda, Sainsbury's and Morrisons all showing strong growth and putting pressure on Tesco (which suffered a small share drop from 31.2% one year ago to 31.0% now). Tesco's response was to relaunch the Clubcard loyalty programme and to double the points awarded (from 1% to 2% of consumer spending).

Overall, considering the contrasting performances of Waitrose and the discounters, TNS suggests that 'recession panic' among British consumers may be abating, at least as far as the grocery sector is concerned. This is possibly due to grocery price inflation having further decreased to 5.1%, which is well below the peak of 9.2% seen in October 2008.

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