29 Apr 2008


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Belt-tightening shoppers turn to discount retailers

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More UK shoppers are turning to discount retailers such as Aldi, Netto and Lidl in the face of growing economic uncertainty, research company Nielsen said today.

Mike Watkins

Its figures for the 12 weeks to 19 April show combined sales for discounters growing ahead of the market at 13% year on year. The discounters' market share on food is now 5.5%.

Although overall sales growth in the grocery sector stood at 5.9% for the three-month period, growth was much slower in the final four weeks.

Once the effect of the early Easter is stripped out, growth in grocery retail was just 1%, despite food price inflation, Nielsen said.

Mike Watkins, senior manager for retailer services at Nielsen said: “We are seeing a volatile market, with consumer confidence, weather and food inflation impacting food sales at the moment.

“With warmer weather and bank holidays, at best we can expect to see underlying growths settle at around 3-4% as we enter May, some 3% lower than at the start of 2008.”

He added: “Contrary to recent reporting, the Nielsen-BRC shop price index tracked food inflation at 4% year on year in March across a wide range of food and drink.

“Whilst this inflation is flattering headline growths, we are not seeing double digit food inflation except on a limited number of food categories.”

Morrisons again outperformed the market, growing by 9.2% and increasing its market share from 10.4% to 10.7%. “But these stellar growths are now beginning to slow,” Watkins said

“While Tesco have regained some momentum, Asda continue to grow sales faster than both Tesco and Sainsbury.”

Share of grocery market spend
12 weeks to 19 April 2008

Tesco 29% +5.2%
Asda 15.8% +6.4%
Sainsbury's 15% +5.1%
Morrisons 10.7% +9.2%
Total Co-op 6.1% +3.8%
Waitrose 3.7% +6%
Somerfield 3.7% +4.6%

Source: Nielsen

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