Competitive pressures limit Tesco dominance

The latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 19 February 2012, show grocery market growth of 4.5%. This is broadly in line with the grocery market’s performance over the past six months.

Edward Garner, director at Kantar Worldpanel, explains: “While the growth rate remains lower than grocery price inflation, currently at 5.5%, the gap between the two measures is narrowing – meaning pressure on household budgets, while still strong, is not getting any worse.

“Tesco’s market share remains under pressure and now stands at 29.7% − a level we last saw in May 2005 – as it faces stiff competition from its rivals. By contrast, the completion of its Netto conversions helped Asda retain its record share of 17.5% that we reported last month.

“Waitrose saw its share rise this month to 4.5% − an all-time record for the retailer. Its continuing strong performance shows that it is a mistake to talk about the ‘average’ UK shopper. Some consumers clearly value good service and instore experience when shopping, which Waitrose claims to provide. The retailer has also benefited from increasing numbers of shoppers, as its store expansion makes its shops accessible to more people.”

At the same time, the ‘Two Nations’ phenomenon continues as value for money remains paramount for many shoppers, with Aldi, Lidl and Iceland all enjoying double-digit growth as they hold on to record shares.

Sainsbury’s continued to out-perform the market in 2012 and lifts its share from 16.5% to 16.6%. Elsewhere, Morrisons dips slightly by 0.1% to 12.2%.

Watch the previous commentary here