Grocery leader Tesco PLC (LON:TSCO) and number four player William Morrison Supermarkets PLC (LON:MRW) posted the best sales growth of the ‘Big Four’ food retailers, according to the latest market share figures from Kantar Worldpanel, as all the sector once again saw sales rise as food price inflation continued to increase.
Grocery price inflation was up 2.9% year-on-year in the 12 weeks to May 21, from a 2.6% increase in the previous three month period.
Kantar said higher prices such as for butter, fish and cola drinks were partially offset by falling prices in other categories including cooking sauces and cooked poultry.
READ: Kantar Worldpanel data shows all 10 major food retailers in growth for the first time in three-and-a-half years
Chris Hayward, consumer specialist at Kantar Worldpanel: “Consumers are starting to feel the pinch as prices continue to rise, with the average household spending an additional £27 on groceries during the past 12 weeks.
“That may not seem like much, but if inflation continues at its current rate over the course of a year that would mean an extra £119 spent on groceries per household.”
Big Four grocers see market shares edge lower
Boosted by the increase in prices, Morrison's saw the best sales performance of the 'Big Four', with a 1.9% rise, while Tesco saw its sales grow 1.8% in the latest 12 week period.
Meanwhile, number two player J Sainsbury plc (LON:SBRY) saw sales rise by 1.7%, and growth for Asda – owned by US giant Wal-Mart Inc (NYSE:WMT) - was 0.9%.
However, all the big four saw their market shares edge lower as disruptive discount food retailers Aldi and Lidl saw their sales rise at the fastest rate since January 2015 and both gained market share.
Aldi's sales rose by 19.8% year-on-year in the 12 weeks to May 21, while Lidl's sales increased by 18.3%, giving the two German firms a joint record combined market share of 12%.
Kantar’s Hayward noted: “62% of the UK population shopped in an Aldi or Lidl during the past 12 weeks, compared to just 58% this time last year – that’s an additional 1.1 million households visiting either of these stores.”
The Kantar data showed overall grocery sales grew by 3.8% year-on-year, the market’s best performance since September 2013.
But all ten UK grocers have seen sales increase
Hayward added: “Once again all ten grocers have seen sales increase, no doubt boosted by higher prices as inflation continues.
“Own label is also a major source of growth for all of the retailers, with sales up an impressive 6.0% year on year in contrast to branded products which grew by just 0.6% during the same period.”
Elsewhere, upmarket food retailer Waitrose, part of the employee-owned John Lewis Partnership saw its sales rise 3.3% year on year, although its market share slipped slightly to 5.2%.
But privately-owned frozen food specialist Iceland increased sales by 8.6%, boosting its market share by 0.1 percentage points to 2.2%, while online grocer Ocado PLC (LON:OCDO) saw sales growth of 9.4% with its market share holding steady at 1.3%.