Fresh takes a bruising
↓ £317.6m Vegetables
↓ £234.5m Meat
↓ £165.2m Milk
↓ £102.9m Poultry
↓ £68.9m Cheese
↓ £74.8m BSM
Nearly a billion pounds have been wiped off supermarket fresh food sales in the past year as the price war has escalated, The Grocer can exclusively reveal.
Prices have been slashed as Aldi and Lidl continue their march into the fresh arena. Vegetables are now regularly sold at a loss, say suppliers. Changing consumer demands have also hit sales of staples such as potatoes and oranges, volumes of which have crashed in the past year.
Six of the 10 biggest category losses for the supermarkets have been in fresh food, the Top Products Survey 2015 reveals today, with the combined decline of veg, meat, milk, poultry, butters & spreads and cheese totalling an eyewatering £963m.
“Fresh foods has been a massive footfall driver for the discounters,” said Mike Watkins, head of business & shopper insight at Nielsen, which produced this year’s Top Products in partnership with The Grocer. “Just over half of Aldi and Lidl’s incremental sales this year have come from fresh foods such as produce, fresh meat & poultry, bakery and chilled food. Fresh food is the new battleground against the big supermarkets.”
With the price of salad staples such as lettuce and cucumber now below the 50p price point as standard in the big four and two kilos of Maris Piper potatoes currently sold for just 29p by Aldi, margins are being hit hard. “Value really has crashed,” said Laurence Olins, chairman of fresh produce distributor Poupart. “Sometimes it’s being sold at a loss, sometimes at a much lower margin for all in the chain.”
Meat and poultry sales have crashed by almost £350m. “The price discounting and deflation the grocery market has certainly had an impact,” said Guy Wooton, director of category & insight at poultry processer Moy Park. “Retailers have reviewed their promotional strategies and moved away from multi-buy deals towards more of a focus on Everyday Low Price. This has also impacted on volumes, although it does mean shoppers are buying more frequently.”
Not all meat is in decline, however. The meat snacks market has gained £11m off the back of growing demand for higher protein products.
“We know 86% of people think protein is a positive step towards a healthier diet,” said Sue McVie, strategic marketing director at Kerry Foods, owner of Mattessons, which has enjoyed £7m growth. “There’s no question Mattessons has benefited from that.”
Defying the overall downturn in fresh food, fruit has also benefited from the snacking trend. “It’s ready-to-eat products that are in growth and those that take preparation are in decline,” added Olins. “Things like ready-to-eat berry packs and avocados, which take no preparation and have found a whole new occasion in breakfast. You can hardly keep a potato on your desk for snacking. Most of these changes are down to the consumer.”