British grocery market faces pivotal moment, says Kantar

The proposed merger between Sainsbury's and Asda would result in a business with a potential grocery market share of 31.4 per cent, according to the latest data from Kantar Worldpanel.

Tuesday, 1st May 2018, 9:45 am
Updated Tuesday, 1st May 2018, 9:51 am
Britain's grocery market is facing a pivotal moment, says Kantar Picture: James Hardisty

Asda achieves nearly two-thirds of its sales outside London and the south east of England in contrast to Sainsbury’s, which registers 59 per cent of its sales in those two areas, according to Kantar’s latest data.

The latest grocery market share figures from Kantar Worldpanel, published today for the 12 weeks to April 22 2018, reveal a market share of 15.9 per cent and 15.5 per cent for Sainsbury’s and Asda respectively, giving the proposed combined entity a potential share of 31.4 per cent.

Over the past 12 weeks, Sainsbury’s increased sales by 0.2 per cent while Asda’s sales rose by 1.4 per cent. Both Sainsbury’s and Asda dropped market share compared to this time last year – down 0.3 percentage points and 0.1 percentage points respectively.

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Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “This is a pivotal moment for the British grocery market. A merger between Sainsbury’s and Asda would transform the traditional landscape placing nearly a third of market share in the hands of the joint supermarket giant, though the march of the discounters – and any enforced store closures – could impact this figure.

“The two supermarkets appeal to different customer bases. Asda achieves nearly two-thirds of its sales outside London and the south east of England in contrast to Sainsbury’s, which registers 59 per cent of its sales in those two areas. Sainsbury’s also appeals to more affluent shoppers (ABC1): this demographic accounted for 62 per cent of all sales at Sainsbury’s in comparison to 46 per cent of sales at Asda. Meanwhile, Sainsbury’s premium own-label line ‘Taste the Difference’ clocked up sales of £832 million annually – nearly two and a half times the size of Asda’s ‘Extra Special’ range.”

Outselling Sainsbury’s in branded goods, Asda also attracts a greater number of households through its doors, according to Kantar.

Mr McKevitt continued: “15.8 million households bought their groceries at Asda over the past 12 weeks – 500,000 more households than shopped at Sainsbury’s – but we are seeing a substantial number of customers frequenting both retailers. Nearly nine million households visited both Sainsbury’s and Asda, with consumers showing little retailer loyalty.”

Overall, the British grocery market grew at its slowest rate since March 2017 at 2.0 per cent – the result of lower grocery price rises. The like-for-like inflation rate is now 2.1 per cent and is expected to fall further in the coming months.

Mr McKevitt said: “Tesco and Morrisons both performed strongly this period. Morrisons was crowned the fastest-growing traditional supermarket, raking in sales growth of 2.2 per cent and holding market share at 10.5 per cent. Although Morrisons continues to prove a favourite with shoppers in its northern heartlands the retailer is also excelling in the capital, where it is growing at its fastest rate. Meanwhile, for the twelfth consecutive period, Tesco has grown more than 2.0 per cent – the first time the retailer has achieved this since March 2011.”

With sales up 9.1 per cent, Lidl became the UK’s fastest-growing bricks and mortar supermarket. The discounter upped its market share by 0.4 percentage points compared to this time last year to reach 5.4 per cent, according to Kantar. Despite traditionally performing well in sales of own-label products, branded sales at the retailer rocketed by 32 per cent with sales of branded alcohol, soft drinks and dairy proving particularly successful.

Meanwhile, Aldi has continued to experience strong sales growth – up 7.7 per cent – increasing its market share by 0.4 percentage points to 7.3 per cent.