UNIVEG Katope UK

TNS figures indicate strong start 2009 for grocery

6th February 2009

From the latest set of market figures released this week it is apparent the low value shopping trends continue. The figures also indicate a robustness of the grocery sector in the current down turn.

While other sectors of retailing continue to bear the brunt of the down-turn in consumer spending, the latest figures from TNS, for the 12 weeks to 25th January 2009, show that the grocery sector is holding up well; underlining its reputation for resilience and the non-discretionary standing of food.

Overall the grocery market saw 6.4% growth in the period, which though boosted by inflation, especially on food, is still underpinned by some volume uplift. It is clear that consumers continue to manage their own inflation both by turning to more value-focused retailers, as well as trading down from premium products, to ensure their basket remains affordable without having to compromise on the full scope of assortment. Indeed it seems that while cutting back on other areas of spending, consumers may be treating themselves with smaller purchases, especially where they perceive good value.

The patterns of relative retailer performance familiar from 2008, continue in this latest release, with the value players both amongst the larger and smaller grocers achieving the strongest growth trends.

Despite the tough annual comparatives now being met, Morrisons (+9.7%), Asda (+8.1%) and Aldi (+24.1%), as well as Lidl and Iceland, are all still maintaining growth trajectories well ahead of the market, while quality-focused retailers are playing catch-up.

As a bell-wether of quality focused retailing, Waitrose trailed the market by almost six percentage points, its growth staying only marginally positive on +0.7%.


12 Week Market Shares

  12 weeks to 27January 2008 12 weeks to 25 January 2009
Tesco  31.2% 30.7%
Asda       16.9% 17.2%
Sainsbury's 16.3% 16.2%
Morrisons 11.6% 11.9%
Somerfield 3.6% 3.3%
Waitrose   3.9% 3.7%
Iceland 1.8% 2.0%
Netto  0.7% 0.7%
Lidl    2.2% 2.3%
Aldi     2.6% 3.0%
Other Multiples  1.6% 1.7%
Total Coops 4.4% 4.3%

Source: TNS Worldpanel


Notably both Tesco and Sainsbury's are lagging the headline growth of the market, though both are suffering from a degree of self-imposed deflation due to the shift in the emphasis of their mixes towards the value-end of the equation: Tesco with the introduction of its discounter brands and Sainsbury's with 'Switch and Save' (particularly with its recent focus on the Basics range).

Potentially we may expect to see the headline growth trends at both Tesco and Sainsbury's strengthen relative to the market as we go through 2009, especially as the effects of higher inflation begin to annualise from the middle of the year onwards. The impact of this would tend to rein in the growth of the likes of Morrisons, Asda and Aldi, for whom 2008 saw the market move to favour them, rather than they move to the market. And the ability of these players to sustain their high growth rates in 2009 will owe much to their success in re-engineering their offers for value to stay ahead of the others.


Source: IGD

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