The Squeeze on the middle

The latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 15 April 2012, show the market growing at 5.0%. This is the highest level of growth since January 2010 but is mainly fuelled by food price inflation rather than real volume increases.

Edward Garner, director at Kantar Worldpanel, explains: “The discounters and Waitrose are outperforming the middle ground as shoppers polarise their spend. To this effect, Aldi and Lidl continue their strong run and both achieve record shares this period. Iceland’s growth rate of 9.1% is also racing ahead of the market – further proof that consumers are convinced by strong value-for-money messages.

“Waitrose sees no slowdown in its growth as some households refuse to let economic pressures affect their food purchasing. This may also be a result of cutbacks on eating out which have meant that some shoppers are willing to spend more money on bringing the dining out experience into the home. The continued growth of premium own-labels, particularly Tesco Finest and Sainsbury’s Taste the Difference, is further evidence of this behaviour.”

Among the big four, Asda has the strongest growth which includes the benefit of its Netto conversions. This is followed by Sainsbury’s with growth just ahead of the market at 5.4%. Both Tesco and Morrisons lag behind the market and their shares drop by 0.2 points compared with last year. However, in the case of Tesco, this is less than the declines seen earlier this year.

An update on inflation

Grocery inflation stands at 5.5%* for the 12 week period ending 15 April 2012. This is unchanged from the two previous reports. This remains above the market growth of 5.0% this period and means that households are still trying to rein in grocery spending by managing down their ‘personal inflation’

Watch the previous commentary here.