The latest TNS Worldpanel grocery market-share figures, published this week for the 12 weeks ending July 15, show the first signs of a consumer slowdown in the grocery market, with growth dipping to just four per cent.
This period compares to a buoyant stretch last year in the run-up to the World Cup, and is clearly showing the impact of much poorer weather combined with an increasing squeeze on consumer spending.
Against this background, Tesco, Asda and Sainsbury’s are all experiencing growth of around five per cent and are running neck and neck.
Waitrose is bucking the trend and pushing ahead of the big three with top-line growth of six per cent, indicating that demand for premium retail is still growing.
Morrisons is faring less well at around three per cent, but Somerfield is facing the biggest challenge, with spending down six per cent versus this time last year, which is largely driven by falling shopper numbers.
Conversely Iceland, Aldi and Lidl are also still enjoying double-digit growth; despite a general consumer spending slowdown. Iceland’s growth is coming through increasing spend per shopper, and Aldi and Lidl from increasing shopper numbers as they step up their new store opening programmes.
Research director Chris Longbottom stressed the importance of keeping a watch on the next quarter before any definite slowdown can be identified. “There are all sorts of things going on at the moment, with utility price inflation and growers and farmers saying we should expect price inflation on food,” he said.
He also expects that although food prices might rise, price wars among the multiples are likely to continue. “All share movements [on the big three retailers] at the moment are very small indeed, which is a symptom of the intense competition in the marketplace,” said Longbottom. “You have only to look at what Tesco is doing with its swing-o-meter advertising campaign. Just to get some growth out of the market, the retailers will continue to compete on price and price cuts, even if it is against a background of higher food prices.”
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