The market is valued at £104bn [Scantrack] and, in the most recent 12 weeks, value growth to August 6 is 3.1% for the total market and 4.7% for grocery only. While some categories - frozen foods, household and confectionery - have struggled to stay in the positive all year, fresh foods and soft drinks have performed well in August due to seasonal trends and warmer weather.
Most of the incremental growth continues to come from Tesco, which has grown market share by 0.7% since May to 30.7%, although share growth has been slower in the most recent four weeks. The next trading statement will be expected to confirm sales growth above the Scantrack market benchmarks.
Waitrose also sees a growth in share to 3.7% from 3.3% following the strategy of selected store acquisition, which has also increased Waitrose overall spend per visit by 11% compared with a year ago. Asda and Sainsbury are both attracting more shoppers than last year, but market shares remain broadly unchanged over the past six months at 17.1% and 15.8% as a result of Tesco stealing spend due to faster roll-out of a multiformat strategy.
With the combined share of Iceland and Kwik Save down to 3.6%, there is also an opportunity for other discounters to fill this vacuum, as the penetration of shoppers using Aldi, Lidl and Netto (combined) is now over 20% of all households every four weeks.
Mike Watkins, senior manager retailer services at ACNielsen, observes: “This time last year we anticipated a slow down in the growth of many grocery categories and a watershed in the acceptance of hypermarkets that would grow the market share of Tesco and Asda in 2006. This appears to have happened and so far Tesco has benefited the most.
“To keep sales momentum going, we are seeing increased media spend by the top four grocers plus new campaigns from Marks and Spencer and Aldi. So Tesco cannot afford to take the foot off the gas, as it has the most to lose.”
With current like-for-like grocery-only sales less strong at 2.5%, all food retailers are having to work hard just to stand still.