The recent warm weather has kept business buoyant in the major supermarket chains with top line sales growths at just over 5%.
Soft drinks, fresh foods, non-food and beer and wine continue to drive sales and help to compensate for just 1.5% underlying growth in grocery over the last 12 months.
Homescan Total Till confirms that Tesco and Asda are the winners post-Easter and continue to grow market share in this early summer period and compared to this time last year.
Tesco dominates with a market share including non-food increasing to 28.4% and Asda is up to 17.5%. Sainsbury has lost share, down to 15.8% from 16.5% compared to 2003.
There has been, however, a marginal improvement in trading at Sainsbury in the recent weeks, with market share in grocery now flat at 16.7% after falling by 1% in the last 12 months.
The sales gains in Morrisons are being outweighed by sales declines in Safeway stores. The combined group share of total spend is 14.8%, making it a very strong fourth force in retailing.
With around a third of all shoppers visiting either Morrisons or Safeway formats every four weeks, there should be significant upside to come once the full impact of the new prices and range is seen in future Morrisons store refits.
For other price-driven retailers on the high street, such as Iceland and Kwik Save, trading remains challenging as shoppers become price comparison-aware due to Morrisons’ marketing.
The modern Kwik Save sells own label as well as big brands and the stores are progressively being reinvigorated into a modern supermarket to help hold the 2.5% share of grocery.
A similar strategy is under way at Iceland to help reverse the recent like-for-like sales declines and build on its 2.5% market share.
Iceland may have the advantage of a higher number of shoppers, 16.4% of households, already visiting every four weeks but these primarily visit to buy frozen foods.
So for all retailers, big and small, the challenge is to speed up store conversions and store refurbishments and to continue developing ranges outside of packaged grocery. This will deflect the impact of price reductions and help manage the resulting effect on profitability.