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UK grocery market gets tougher

Published:  23 July, 2008

UK: The latest TNS Worldpanel grocery market share figures for the 12 weeks ending August 12 show further signs of a consumer spending slowdown with market growth dipping to 3%.

TNS Worldpanel director of research, Edward Garner, said: "This has dropped from a three-year peak of 6% for the 12 weeks ending May 20.

"In part, this reflects renewed concentration on price competition as embodied by the latest Tesco Swingometer' advertising."

Tesco, Asda and Sainsbury's have all exceeded the total market growth rate for the latest period. Their combined share now accounts for nearly 65% of the grocery market.

The independent sector - including off-licences and drink outlets selling food - has suffered over the years, but the remaining outlets have found their niche as they have also outperformed the market and lifted share from 2.7% to 2.8%, TNS said.

Discounters Aldi and Lidl posted market-leading growth of 9% and 10% respectively, whereas Netto matched the market growth of 3%.

Somerfield sales dipped 8%, bringing its share down to 3.9% from 4.4% a year ago. Owners, the Robert Tchenguiz consortium, are reacting by refinancing and acquiring new stores.