UK’s biggest grocers lose market share to discount rivals

The UK’s biggest supermarkets lost market share to rivals Aldi and Lidl over the three months to October as the arrival of cooler weather marked the end of a bumper summer for grocers, figures show.

Tesco, Sainsbury’s and Asda all lost market share over the 12 weeks to October 7, with Tesco dropping 0.6 percentage points to 27.4% despite sales rising by 0.9% and widespread interest in its new discount arm Jack’s, according to analysts Kantar Worldpanel.

Sainsbury’s was down 0.4 points compared with last year at 15.4% and Asda dropped 0.2 points as Aldi and Lidl increased sales by 15.1% and 10% respectively.

Aldi’s growth was its fastest since January last year and helped it to a market share gain of 0.8 points to 7.6%, while Lidl attracted 5% more shoppers through its doors compared with the same period last year and persuaded them to spend an extra 55p per trip, leading to market share of 5.6%.

Co-op was the only other bricks and mortar retailer to gain market share with sales up 7%.

Overall grocery sales grew 3.2% compared with the same 12 weeks last year, a slight slowdown from the highs reached during the summer.

However, Kantar noted growth was above 3% for the fourth period in a row and well ahead of the average market growth rate over the past five years of 1.7%.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Consumer spending often slows in early autumn, after the excesses of summer barbecues and before the festive season kicks off.

“Christmas will be here before we know it and some families seem to be getting into the spirit already – 8% of households bought mince pies last month, spending a total of £4 million with 70 days still to go before the big day.”

Figures from analysts Nielsen show sales growth slowed to 1.9% over the four weeks to October 6, although the unseasonably warm weather this month contributed to an out-of-season 9% increase in sales of soft drinks.

Mike Watkins, Nielsen’s UK head of retailer insight, said: “The beginning of autumn has signalled an objectively disappointing, though not entirely unexpected, slowdown in sales.

“But keeping in mind retailers had such a strong summer period, it’s likely shoppers are pressing the reset button after a season of excess. The warmer weather also potentially has shoppers delaying the need to stock up and hunker down for the colder months.

“This, paired with recent increases in fuel prices and energy bills, which are having an impact on household budgets, has meant shoppers are becoming more cautious about their spending.”

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