Sainsbury's, Co-op grow on convenience

30 July 2015
LONDON: Sainsbury's has edged ahead of Asda to become the UK's second-largest supermarket after profiting from its focus on convenience, non-food sales and its strong presence in fast-growing southern England, according to new data.

In a report covering the 12 weeks to 19 July, research firm Kantar Worldpanel said Sainsbury's took 16.5% share of the fiercely competitive UK groceries market despite a fall in sales of -0.3% compared with the same period in 2014.

Sales at Walmart-owned Asda, which has a relatively shallow footprint in the south of the country, declined -2.7% to 16.4%, making it the worst performer among the "Big Four" UK grocery retailers.

The other two, Tesco and Morrisons, saw their sales contract by -0.6% and -0.1% respectfully. With 28.5% market share, Tesco remains by far the largest supermarket chain but the report credited Morrisons (10.9% share) with being the best performer among the Big Four.

Turning to their smaller rivals, the report confirmed that the challenge from German discounters Aldi and Lidl shows little sign of slackening.

Aldi grew by 16.6% to take 5.6% market share while Lidl saw growth of 11.3%, giving it 4.0% share of the market.

Elsewhere, The Co-operative returned to growth for the first time since July 2014 after increasing its sales 1.0% and its market share now stands at 6.3%.

Fraser McKevitt, head of consumer and retail insight at Kantar Worldpanel, attributed the Manchester-based retailer's success to its focus on convenience.

Growth accelerated at Waitrose, where sales increased 3.0% since last year to take its market share to 5.0% and the report said this was due to its "Pick Your Own Offers" initiative.

Finally, sales at Iceland rose 3.0% over the period, which the report said had coincided with its recent "Power of Frozen" advertising campaign.

Overall grocery sales increased by 0.8% compared with a year ago, but the stronger growth rates were recorded by the UK's smaller retailers.

"The continued slow growth of the overall market can be explained by minimal volume growth and lower like-for-like prices, both as a result of cheaper commodity prices and the fierce competition between supermarkets," said McKevitt.

"Comparable groceries are now 1.6% cheaper than a year ago, meaning prices have been falling since September 2014, although they are projected to start rising again by early 2016," he added.

Data sourced from Kantar Worldpanel; additional content by Warc staff
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