UK consumers are cutting back their spending on groceries in response to rising prices, with new figures demonstrating that shoppers are increasingly focused on value-for-money offers and making savings.
Although grocery sales in the UK increased by 2.6 per cent in the 12 weeks to 20 March 2010, this figure was significantly down from the 3.9 per cent growth seen during the 12 weeks to 20 February.
According to analyst Kantar Worldpanel, the fall in spending is being influenced by a continuing increase in grocery price inflation, which now stands at 4 per cent, the first time the market growth rate has fallen below the inflation rate since July 2009.
The anaylst said the figures were evidence that UK shoppers were taking an increasingly gloomy view of 2011 and reining in their spending.
Market leader Tesco and its nearest rival Asda both experienced low sales growth of 2.3 per cent and 2.1 per cent respectively during the 12-week period, although Sainsbury’s and Morrisons did slightly better with 3.1 per cent rises each.
The real success story during the month has been discount retailers Aldi and Lidl, with the former seeing its market share rise to 3.1 per cent, a 14.8 per cent rise from a year ago, while Lidl’s market share reached 2.5 per cent, up 12 per cent from March 2010.
However, Kantar Worldpanel said both performances were being driven by existing clients spending more, rather than new shoppers visiting the stores.
Kantar communications director Edward Garner said: “While there are no signs yet of the explosive growth in economy own-label ranges that we saw in 2008, there are now clear indications that value-for-money is driving retailer performance.”
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