Sun shines on Co-op and grocery brands

The growth of branded products has outstripped that of own-label lines for the first time since May 2015 according to the latest grocery market share figures from Kantar Worldpanel, published today for the 12 weeks to 12 August 2018. Heavily branded categories – such as savoury snacks, ice cream and soft drinks – performed particularly well over the hot summer months, helping branded growth of 3.9% overtake that of total own label. This compares to total grocery market growth of 3.5%. 

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, commented: “Consumers’ willingness to spend that little bit extra to fully enjoy the summer sunshine has helped push brands ahead of their own-label counterparts. At Tesco and Sainsbury’s branded growth has outstripped own-label for a while and – as the two biggest retailers in the grocery market – this has contributed to the market shift. More expensive premium own-label lines across the market are still growing strongly though – up 6.3%. 

“The grocery market experienced strong growth buoyed in particular by the recent heatwave.  Over July, thirsty Brits spent an additional £67 million on alcoholic drinks, while non-alcoholic beers were cheered on by the sun with sales up 58% compared to this time last year. Soft drinks also increased – up 28%. Meanwhile, Love Island not only tugged on shoppers’ heartstrings but also their purse strings as men’s skincare products jumped by 16%.”

Co-op continued to feel the summer glow, experiencing its fastest rate of growth in nearly seven years. Fraser McKevitt explains: “The last time Co-op saw sales growth of 7.8% it was still benefiting from the acquisition of Somerfield, so its performance is particularly notable this period. Consumers’ current preference to shop locally when the sun is shining has helped Co-op attract an additional 263,000 new shoppers through its doors.  The retailer also saw the average customer visit 22 times over the 12-week period, contributing to a market share increase of 0.3 percentage points to 6.6%.

“With growth up 2.7%, Morrisons regained its position as the fastest-growing of the big four supermarkets. Over the past 12 weeks Morrisons cut back on promotions and also gained 231,000 new shoppers, 66% of which were more affluent ABC1 customers.”

Experiencing growth of 2.6% – the second-strongest growth of the big four – Asda’s market share dropped by 0.1 percentage points to 15.2%. Fraser McKevitt continues: “Asda has bucked the trend when it comes to brands versus own labels.  Its private lines grew ahead of brands – both its standard-tier range and premium ‘Extra Special’ range experienced a sales increase of 8%. Over the past 12 weeks two-thirds of Asda’s growth came from family households.”

Tesco saw strong growth from its Express convenience stores and increased total sales by 1.8%, though the retailer’s market share dropped by 0.5 percentage points to 27.4%. Meanwhile, Sainsbury’s experienced its fastest rate of growth since January 2018, up 1.2%. The grocer was boosted by a strong online performance and the growth of its premium ‘Taste the Difference’ range. Sainsbury’s market share declined by 0.4 percentage points to 15.5%.

Fraser McKevitt continues: “Aldi witnessed double-digit growth of 12.6%, helping the retailer up its share of the market to 7.6% – a 0.6 percentage point increase on this time last year. Over half of the retailer’s growth came from the fresh and chilled aisles, with meat, dairy and ready meals performing particularly well. At Lidl, sales jumped by 8.6% to help the retailer secure a 5.5% share of the market. The grocer’s premium own-label sales rose by nearly a third, while sales of branded products increased by 37%.”

Sales at Iceland rose by 3.8% to hold market share of 2.1%. Over three-quarters of Iceland’s growth came from fresh and ambient food and drink and these sectors accounted for over half of the retailer’s sales. Despite experiencing sales growth of 2.4%, Waitrose dropped market share by 0.1 percentage points to 5.0%. E-commerce specialist Ocado achieved sales growth of 8.5% and increased market share by 0.1 percentage points to 1.2%.    

An update on inflation

Grocery inflation now stands at +1.9%* for the 12 week period ending 12 Aug 2018. Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016. Prices are rising fastest in markets such as cola, butter and canned fish.