Sales growth at the UK’s leading supermarkets has fallen for the sixth time in seven months, with the discounters continuing to outperform the market.
Shoppers spent -3.0% less money at the leading supermarkets during the four weeks ending 19 July 2014 than the same period a year ago, according to new data from Nielsen.
Tesco and Morrisons suffered a -5.3% and -5.4% drop in sales respectively compared to the same period in 2013. Tesco’s market share fell from 29.7% last year to 28.3% and Morrisons’ fell from 11.4% to 10.9%.
But Aldi’s market share overtook Waitrose for the first time (5.2% against 5.0%) as it recorded a 25.3% year-on-year increase in sales. Lidl now has 3.8% of market share with sales growth of 16.5%.
Between them Aldi and Lidl were visited by 14% more people than a year ago.
“The grocery sector has been hit by a triple whammy,” said Nielsen’s UK head of retailer and business insight Mike Watkins.
“Food inflation has hit a record low of 0.6% while more of people’s shopping is being done at the discounters, which means less money going through the tills, overall. The bad news is compounded with this trading period being unable to compete with the strong sales during last year’s early July heatwave when sales were boosted by +6%.”
He added that the next battleground would be fresh food, a traditional strength of the major food retailers.
“The discounters have been very effective at stealing share for packaged goods – such as cans, packets and bottles,” he said.
“If they can also eat into fresh foods, which account for almost half of food and drink sales, we could see a seismic shift in the sector over the next six months, particularly as fresh food raises the overall store image, in effect, a double benefit.”