The growth of hypermarket sales is a staggering 9% and the success of Tesco in the conversion of more than 100 stores to Extra has contributed to a 30.2% share of trade according to Homescan Total Till in the four weeks to January 22, and 29.6% over the full 12 weeks.
Asda too has achieved a milestone with an 18% share of Total Till built on an excellent December (19.5% market share) and a general merchandise offer on par with that of Tesco.
Having lost share over the last 12 months, Sainsbury increased market share to 15.9% during the last 12 weeks and is still ahead of Asda as the number two food retailer with a 16.8% share of grocery sales. If the momentum is maintained on the back of a clearer price message, then the green shoots of a corporate sales recovery seem feasible this spring. Sainsbury has about 35% of store space devoted to superstores, compared with Asda and Tesco at between 20% and 25%, and so is more dependent on the format’s performance.
Mike Watkins, manager of retailer services, comments: “The market growth benchmark for superstores has slowed to 2%, with some grocery categories in decline and this is compounded as more stores convert to hypermarkets. There is, however, some trading up from the high street as consumers buy more alcohol, fresh foods and toiletries.”
He adds: “All of which could help Sainsbury, which will expect to gain share from weaker, high street retailers where the underlying industry growths are now barely positive.”
With nearly all divestments complete, Morrisons’ share will stabilise close to the current 12.9%. Nevertheless the average spend per buyer in Morrisons’ stores has been diluted by Safeway conversions, so attracting new shoppers to the new locations is key to success for Morrison’s.
Overall a quarter of all food shopping is still made at superstores but there is 12% less total sales footage given to this format than five years ago. So driving sales densities by adapting ranges to meet the shopper mission is the challenge, the same challenge that awaits Sainsbury and Morrisons.