UK downturn starts to bite non-grocery sales
In the UK, the latest TNS Worldpanel grocery market share figures have shown a sharp contrast between grocers (which are continuing their currently robust growth) and non-grocers, which are now in decline.
According to TNS, the probable explanation for this phenomenon is that consumers can easily postpone major and non-essential non-food purchases, while regular spending on food is more likely to remain static or even increase (thanks to food price inflation).
Market sharesTesco 31.1% Asda 16.9% Sainsbury 16.0% Morrisons 11.4% Waitrose 3.9% Somerfield 3.7%The main UK grocers' market shares are as follows: Tesco (31.1%), Asda (16.9%), Sainsbury's (16.0%), Morrisons (11.4%), Waitrose (3.9%), and Somerfield (3.7%).
Among grocers, the spotlight of success has fallen firmly upon the discounters, and in particular Aldi which has posted growth of 19% to lift its share from 2.5% a year ago to 2.8% now. This is almost completely fuelled by new shoppers visiting the stores rather than existing shoppers spending more. The German-owned Aldi has been investing heavily in new stores (now numbering over 300) and has increased levels of advertising, and this investment is being rewarded with strong growth in the current climate.
Other gains While not equalling Aldi's performance, Lidl has also grown strongly whereas the Danish-owned Netto has not kept up with market growth, showing a slight loss in market share.
To some extent, Iceland operates like a discounter in that it shows a similar shopper base and runs an aggressive price-cutting programme. Its strong run has also continued with year-on-year growth of 12%.
With regard to the big four supermarkets, both Tesco and Sainsbury's have shown growth slightly behind the 'Total Grocers' average, and have therefore seen slight share erosion. Conversely, Asda and Morrisons have continued to perform strongly and have also improved their shares, year-on-year.