Top-line food growth in the multiples slowed in August to 3.4% with non-food growth back in single digits at 8.6% [Scantrack]. Tesco’s increase in total till share to 30.5% from 28.9% over the past 12 months has been at the expense of any retailer unable to drive footfall and sales as well as it has done with a multi-format and multi-channel strategy.
Mike Watkins, senior manager retailer services, says: “The trading environment has become more difficult. And while EDLP is now the primary driver of food sales, this is not enough to tempt shoppers into discretionary spend. So multibuys are back on the agenda.
“Multibuys currently account for 54% of all promotional spend, up from 47% this time last year, and now support 14% of the overall basket spend.”
Over the summer, more shoppers have visited Asda and Somerfield and a quarter of households are now using Morrisons every four weeks, the same as for the co-operative societies.
Sainsbury, like Asda, is holding but currently not growing grocery share with a 17.1% and 16.1% share respectively in the 12 weeks to September 3. Morrisons’ group share has now fallen from 14.7% to 11% in only 12 months as a result of store disposals. Grocery, the focus for the enlarged chain, is at 12.2% share.
Tesco may currently lead in out-of-town retailing but more than a third of all fmcg sales are made in stores of up to 10,000 sq ft where there are many retailers competing for share of wallet.
In small store retailing, the co-operative societies are getting back on track after a difficult start to the year. However, they are now meeting the faster-growing Somerfield in the local neighbourhood.
Somerfield may or may not have new owners shortly, and has faced difficult like-for-like growth, but meanwhile is benefiting from store acquisitions and rebranding from Kwik Save, while a significant national roll out lies ahead for the so-far successful new formats such as Market Fresh and Essentials.
With the trend for shoppers to use more and different types of food stores, getting the much-needed incremental sales growth from the high street, food or non-food, is an urgent need for all supermarket chains.