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Kantar Worldpanel: It is the 'golden' age of groceries for consumers, but not for retailers

Published:  09 May, 2016

The latest grocery share figures from Kantar Worldpanel released last week show all major supermarkets posted a slowdown in their rate of growth, but consumers are saving more than ever.

The figures are for the last 12 weeks ending the 24 April 2016.

"Consumers are enjoying a golden period of cheaper groceries with like-for-like prices falling every month since September 2014. Nearly two years of falling prices mean the average household is spending £78.10 a week in the supermarket, so consumers have annually saved more than £400 than if prices had risen at the same rate as the last decade," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Some of what is attributing to the slowing of growth is due to ongoing price deflation. The deflation has less to do with promotional deals through retailers which have seen a decline according to McKevitt.

"Lower prices are not the result of more groceries being bought on promotion. In fact promotional levels fell in the last year - in the past 12 weeks 38.5% of spend was on promoted goods, a decline from the 39.8% last April. Retailers are aiming for simplicity in their pricing and only a quarter of promotional spend is now through multibuy deals - a 24% drop on last year. This change has been evident across every grocer but most notably in Sainsbury's, where only 7% of deals are now multibuys. Straight price cut deals tend to offer greater discounts so shoppers will see these as a welcome benefit across the market."

The price cuts across all retailers is in response to the aggressive market share growth that the discounters have achieved.

"Grocery inflation now stands at -1.5% for the 12 week period ending 24 April 2016. This means shoppers are now paying less for a representative basket of groceries than they did in 2015. This is the 21st consecutive period of grocery price deflation. Falling prices reflect the impact of Aldi and Lidl and the market's competitive response, as well as deflation in some major categories," according Kantar's report.

Despite the tough trading conditions, The Co-operative is growing sales, which are up 3.3% year-on-year and its market share jumped to 6.2%. Waitrose has also seen a slight increase in market share, which rose 0.1% for the 12 weeks to 5.2%.

But the largest retailers suffered with Sainsbury's sales falling 0.4%, Morrisons dropping 2.6%, Tesco sales down 1.3%  and ASDA saw sales fall 5.1% for the period.

Lidl saw sales jump 15.4% attracting an additional 648,000 shoppers. Aldi saw an additional 732,000 shoppers drive sales up 12.5%.