Supermarkets Ramping Up Promotions; Aldi Achieves Record Market Share
Kantar:
Take-home sales UK grocers up 1.8% 4 wks to 23 March compared vs 2024, slowest rate vs June 2024. Grocery price inflation 3.5% (same period).
Fraser McKevitt, head of retail and consumer insight Kantar: “.. prices continuing to rise, supermarkets need to invest to attract shoppers” “Promo sales 28.2% of total grocery spend, highest March level for 4 years.”
Retailer price cuts = £2.6bn promo spend, up 8.8% vs 2024 ( £686m on multibuy deals and ‘extra free’ offers).
This surge smaller vs 2008 financial crisis, average 2012 deal-spend was 39.8%, i.e more to come.
Kantar survey: number of people financially struggling 22%, down from 2022 27% peak.
“The rising cost of groceries = third of consumer worries, vs energy bills and UK’s overall economic outlook.
But consumers still want treats: sales of chocolate eggs and seasonal confectionery Feb sales £134m.
Aldi prepares to celebrate the 35th anniversary of its first UK store opening, market share now 11.0%, up 0.3 percentage points vs 2024, sales up 5.6%
Lidl’s sales up 9.1%, market share 7.8%, 0.4 percentage points higher than a year ago. It attracted 385,000 more shoppers last month, more than any other grocer, and saw a double-digit rise in footfall.
Ocado gain fastest-growing grocer, held now for 11 months, sales up 11.2%. For the first time, a 2.0% share of market.
Spending on groceries at M&S up 13.1%, on top of M&S goods sold through Ocado.
Tesco saw spending through its tills rise by 5.4%, nearly half a billion pounds more than the same period a year ago. The UK’s largest grocer made the biggest share gain, with its portion climbing from 27.3% to 27.9%.
Sainsbury’s reached 35 consecutive periods of year-on-year growth, with sales up by 4.1% as it grew ahead of the market. Its share nudged up to 15.2%.
Despite its turnaround efforts, sales at Morrisons were up only 0.6%, and its market share slipped to 8.5%. Meanwhile, Asda’s price rollback campaign appears not to have yet had a significant impact on its performance, with its market share declining to 12.5% after a 5.6% fall in sales.
NamNews Implications:
* The key standout is the Tesco-Sainsbury’s-Aldi-Lidl growth in market share, largely at the expense of Asda and Morrisons.
* Moreover, increases in sales performance across the board is being ‘bought’ via price promotion.
* With possibly more of the same as Autumn Budget tax increases now begin to bite in April.
* Suppliers need to anticipate the probability that retailers will now want (need?) them to share some more of the promo-cost of encouraging uncertain shoppers to spend.
* Any reluctance by brand owners runs the risk of more consumers turning to own label alternatives…
MarketShares Tesco Sainsburys Asda Morrisons Aldi Lidl