Ocado Group PLC (LON:OCDO) and Wm Morrisons Supermarkets PLC (LON:MRW) continued to impress as grocery sector sales softened slightly but remain supercharged by the effects of the coronavirus pandemic.
The total grocery market grew by 14.4% during the past 12 weeks, according to data from Kantar, down from the record 16.9% reported a month ago.
Online grocery shopping climbed to a new record market share of 13.5%, with all the major supermarkets upping their ‘multi-channel’ game.
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But Ocado has benefitted most from this trend, reaching its new market share of 1.8% over the past 12 weeks after yearly growth remained well above 40% for the third month in a row.
Grocery inflation eased for a second month, dropping to 2.9% for the 12-weeks to August 9 from 3.6% reported in July and 4.0% in June, having been climbing before that from 3.1% in May and 1.9% in April after many months oscillating around 1%.
Rival data from Nielsen was also released on Tuesday showing supermarket sales growth slowed to 7% over the recent four-week period, with store sales broadly flat and online sales up 117%.
“While things are far from normal, the data shows a gradual softening of the more extreme lockdown trends in the grocery market,” said Charlotte Scott, consumer insight director at Kantar, standing in for grocery data legend Fraser McKevitt.
“The relaxing of rules across much of the country means shoppers are less inclined to stock up their cupboards with regular large trips.”
She said the average spend had dropped below £25 for the first time since March, to £24 versus the pre-Covid average of £19, while the average of 14 shopping trips per month per household is lower than it was last month, but is higher than in April and May, when lockdown rules were much tighter.
“So, while some consumers have shopped more often in the past month, the story varies in different parts of the country, with localised lockdowns and slower openings resulting in people making fewer trips in the North, the Midlands and Wales.”
Kantar also noted other atypical behaviours that were continuing, with more expensive brands and premium own-label lines doing better than they would normally be expected to do in a recession.
Though Kantar’s data shows the August launch of the government’s ‘Eat Out to Help Out’ scheme to help the hospitality industry has been successful in its first two weeks, with a significant uplift in footfall at restaurants, cafes and bars between Monday and Wednesday over the past fortnight, alcohol sales for supermarkets were also still bubbling along at elevated levels.
Of the big four supermarkets, Morrisons was top dog for the second month in a row, with sales up 16.0%, following growth of 17.4% and 10.5% in the previous two reports.
Tesco PLC (LON:TSCO) was next, with 12.8% growth to follow its earlier 15.1% and 12.1%, though it lost market share of 0.4 percentage points.
Sainsbury’s lost even more, dropping 0.5ppts after growth of 10.9% over the past 12 weeks, down from 13.5% and 12.5% in previous outings.
Asda lost 0.6ppts with growth of 9.5%, with most of the market share gains being made by Iceland, Co-op and small independent stores, with discounters Aldi and Lidl roughly flat in terms of market share.
Ocado, Tesco, Sainsbury's and Morrisons all saw their shares marginally higher on Tuesday morning.
Analyst Neil Wilson noted the food price inflation of 2.9% "raises the stagflation alarm bells and underpins the sense that inflation, at least on a range of basic commodities, will rise".
At JPMorgan Cazenove, analysts noted that while Aldi and Lidl remained roughly flat, one of the trends in the report was that "discounter performance is improving".
They also observed "increased polarization in the market between winners and losers", that the Big Four altogether "remain net losers (Asda & Sainsbury in particular)", along with the continued shift to online and convenience.