Subscriber login Close [x]
remember me
You are not logged in.

UK grocery market declines for first time in 20 years, says Kantar WorldPanel

Published:  20 November, 2014

The ongoing price wars in the British grocery market have led sales to decline by 0.2% - the first decrease since market research firm Kantar World Panel began keeping records. 

The ongoing price wars in the British grocery market have led sales to decline by 0.2% - the first decrease since market research firm Kantar World Panel began keeping records.  

The most recent figures, for the 12 weeks ending November 9, 2014, show an historic turnaround for the grocery market, which has seen sales increase for the past 20 years.  

Fraser McKevitt, head of retail and consumer insights at Kantar Worldpanel said: "We have faithfully reported grocers as growing on a 12 week basis every month since 1994. Well that has now all changed. As overall sales this time fell by 0.2%. Quite some turn around."

The figures show that total till roll for the total grocers came in at £24,876,830 compared to £24,915,760 for the same period last year.

"Price wars can either be phony with a lot of noise, but not much action or real and very serious indeed. This price war is one of the real ones, with the typical basket of goods now costing 0.4% less than the same basket last year," he said.

McKevitt reports the decline is yet another challenge facing grocers as they prepare for the festive trading period.

McKevitt said: "The declining grocery market will be of concern to retailers as they gear up for the key Christmas trading season. The fight for a bigger share of sales has ignited a price war which means an average basket of everyday goods such as milk, bread and vegetables now costs 0.4% less than it did this time last year. This is bad news for retailers, but good news for shoppers with price deflation forecast to continue well into 2015."

According to McKevitt discounters that have now taken hold in the UK market are blame for the structural shift that is currently taking place.

He said: "Of course it is Aldi, up 26% and Lidl, up 17%, that have caused all the market disruption. 2014 has seen the so called market discounters join the mainstream."

Waitrose is also still growing despite the down turn, with sales up 5.6%. Asda has been able to hold on as well, only declining by 0.2%, which is in line with market performance. Tesco continues to lose market share and fell -3.7%, Morrisons declined by -3.3% and Sainsburys fell -2.5%.

There has been no sign that price wars will be letting up any time soon. McKevitt said: "No signs of a turnaround yet."

"Deflation will be with us well into 2015. Great news for shoppers, but could be tough times for some retailers," said McKevitt.