▼ £159.2m Bread
▼ £148.9m Potatoes
▼ £103.2m Own-label milk
▼ £77.3m meat
▼ £31m lettuce
▼ £14.2m Tea
Staple products including fruit & veg, bread and milk are the biggest casualties of the bitter price war raging in the UK grocery market.
The Grocer’s 2014 Top Products Survey - produced in association with Nielsen - reveals traditional supermarkets have lost hundreds of millions in sales because of the price war and loss of market share to the discounters (whose figures are not included).
The hardest-hit category is veg - down an eye-watering £400m year on year in the 12 months to 11 October - driven by intense price competition between the big four and the discounters as well as strong harvests, which brought down prices.
The value of the lettuce market has fallen £31m in the wake of deep discounting on iceberg. And potatoes have crashed almost £150m as a result of improved harvests and swingeing cuts - exemplified by Aldi this week slashing 1.5kg bags of Maris Piper to just 29p.
Although value sales have taken a beating, lower prices have led to volume uplifts for some veg. “We have seen a decline in demand for core traditional veg, so we have to ensure we price them competitively,” said Tesco fresh produce category director Kris Comerford. “This is why we have invested in core veg areas, and the volume turnaround has been pleasing.”
As with fruit and veg, competition from the discounters has played a major role in the decline in value of fresh meat.
“Aldi and Lidl continue to expand their red meat lines with great success,” said Eblex trade marketing head Mike Whittemore. “Stocking limited SKUs and concentrating on the top five or six red meat products per protein obviously works.”
Milk and bread have also been used as powerful weapons in the war for market share. Driven by cuts to four-pinters, the average price per litre of own label milk has slumped 4.6% year on year - contributing to £100m being wiped off the own-label market.
Plant bread volumes have fallen 6.4% year on year as consumer interest in sliced white bread has weakened, but the flight to the discounters, and brutal cuts to the price of own-label loaves, have driven value sales down £159m (or 8.9%).
The discounters are also denting sales of tea in the supermarkets - though movement towards premium product has helped to prop up value against sharp falls in volume. In particular, suggests one leading supplier, discounters are benefiting from selling packs containing ‘one cup’ tea bags, slightly smaller than standard bags. “These bags are a lower weight to hit lower price points,” he added.