Mike Watkins, senior manager retailer services at Nielsen said: “Food inflation is currently running at 6% so in real terms, the industry has ground to a halt.”
He added: “Categories with the greatest volume slowdowns are those which are seeing the greatest inflation, such as Dairy and Bakery, but also Household and Petcare where consumers are now making discretionary savings.
“In the last four weeks there has also been a shift away from premium own label towards standard own label and we have also seen budget private label growing at +12%.”
Watkins said: “Whilst budget lines account for only around 2% of the typical shopping basket they offer a prudent substitution for shoppers needing to make savings on their weekly shop.
“This shift presents the discount retailers with another opportunity to widen their offer and so attract more shoppers away from the major supermarkets.”
Food retailers with a focus on price and value continued to outperform the market.
Morrisons has grown at almost 9% year on year in the last four weeks and Asda 7.4%.
Iceland turned in an impressive 9.7% year-on-year growth– outperforming all the other major multiples.
Share of grocery market spend by retailer
12 weeks to 14 June 2008
Second figure represents the change in value of sales
Tesco 28.1% +3.5%
Asda 15.4% +6.1%
Sainsbury’s 14.4% +2.8%
Morrisons 10.4% +7.9%
Co-op 6.2% +4.1%
Waitrose 3.5% +2.4%
M&S 3.7% +0.1%
Somerfield 3.6% +3.4%
Source: Nielsen
