Shoppers’ flight to the discounters has contributed to a slump in sales of Fairtrade groceries, exclusive research for The Grocer has revealed.
Supermarket sales of Fairtrade goods have fallen 4.7% to £728.2m on volumes down 7.6% in the past year [Kantar Worldpanel 52 w/e 9 November 2014].
The growth of Aldi and Lidl at the expense of the mainstream mults, which sell a higher proportion of Fairtrade certified goods than the discounters, is a key reason for the decline.
Aldi has the lowest share of Fairtrade sales of any major retailer, at 0.8% compared to 3.3% of the grocery market. Sales are up 3.9%, a fraction of the retailer’s growth in the wider grocery market.
Lidl commands 1.4% of the Fairtrade market and has seen sales fall by 3.9%. A spokeswoman said the retailer currently stocks 16 Fairtrade lines, including bananas, sugar and wine.
Fairtrade CEO Michael Gidney said the price war is impacting sales of Fairtrade goods, although he claims volumes have held steady overall, when food service and on-the-go are taken into account. “Value is down as a consequence of the retail price situation,” he said. “There are deep discounts going on and price wars across key lines.”
A spokesman for Aldi said the retailer currently stocks Fairtrade organic bananas, chocolate, coffee, tea and wine and claimed the movement is “important” to the retailer.
“To pass on cost savings to our customers, we stock fewer product lines than our competitors, and avoid selling multiple types of a single product,” he added. “Therefore, in terms of our entire product portfolio, Fairtrade products lines are significant.”