With the consolidation of the top end of food retailing complete, the now top four retailers (previously five) have a commanding 77% market share according to Homescan Total Till.
While this is high compared to some European countries it is only slightly higher than three years ago when the same five accounted for 74% of sales.
However, shopping preferences have changed and Sainsbury’s share has fallen to 15.8% today against 18% in 2001 while Tesco and Asda have increased share to 28.7% and 17.4% respectively. For Tesco this is its highest ever market share.
Over the last three months Safeway shoppers have continued to shop elsewhere, with penetration falling for this fascia to 24.4% in the four weeks to July 10 compared to 25.8% a year ago.
And as the impact of price cuts in Safeway show through, Morrisons has taken the biggest hit with value market share down from 15.8% to 14.7% in the 12 weeks to July 10. Sainsbury’s share is also down 0.6%.
The recent profit downgrades from Morrisons should come as no surprise as the integration of large and different food retail chains can be challenging, particularly where the shopper base is fundamentally different. Recent examples include Somerfield with Kwik Save and Carrefour with Promodès. Market share fell in the short term, the acquiring retailer re- positioned the customer proposition or prices and eventually like-for-like sales growth returned.
Mike Watkins, manager of retailer services at ACNielsen, said: “This suggests creating and then sustaining a long-term strategy is the key to success in food retailing but the full effects are rarely seen immediately.“
Just as important for the future is that the penetration of the Morrisons fascia has increased considerably from 14% to 16% over the last 12 months and the Homescan Total Till share of trade has remained stable in recent weeks at 6.5%. But this share includes non-food and Morrisons is primarily a grocer so this underlying strength is seen in a continued increase in market share on the Homescan Grocery monitor to 6.8%.
With top line retail growth for the multiples at 5.6% driven by strong consumer demand for non-food and helped by early summer hot weather and Euro 2004, it is only the Morrisons fascia and Tesco who have increased grocery market share in the last 12 weeks.
While this is high compared to some European countries it is only slightly higher than three years ago when the same five accounted for 74% of sales.
However, shopping preferences have changed and Sainsbury’s share has fallen to 15.8% today against 18% in 2001 while Tesco and Asda have increased share to 28.7% and 17.4% respectively. For Tesco this is its highest ever market share.
Over the last three months Safeway shoppers have continued to shop elsewhere, with penetration falling for this fascia to 24.4% in the four weeks to July 10 compared to 25.8% a year ago.
And as the impact of price cuts in Safeway show through, Morrisons has taken the biggest hit with value market share down from 15.8% to 14.7% in the 12 weeks to July 10. Sainsbury’s share is also down 0.6%.
The recent profit downgrades from Morrisons should come as no surprise as the integration of large and different food retail chains can be challenging, particularly where the shopper base is fundamentally different. Recent examples include Somerfield with Kwik Save and Carrefour with Promodès. Market share fell in the short term, the acquiring retailer re- positioned the customer proposition or prices and eventually like-for-like sales growth returned.
Mike Watkins, manager of retailer services at ACNielsen, said: “This suggests creating and then sustaining a long-term strategy is the key to success in food retailing but the full effects are rarely seen immediately.“
Just as important for the future is that the penetration of the Morrisons fascia has increased considerably from 14% to 16% over the last 12 months and the Homescan Total Till share of trade has remained stable in recent weeks at 6.5%. But this share includes non-food and Morrisons is primarily a grocer so this underlying strength is seen in a continued increase in market share on the Homescan Grocery monitor to 6.8%.
With top line retail growth for the multiples at 5.6% driven by strong consumer demand for non-food and helped by early summer hot weather and Euro 2004, it is only the Morrisons fascia and Tesco who have increased grocery market share in the last 12 weeks.
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