Price wars saved UK shoppers £182m in last three months, says Kantar

By Erin Smith

Published: 17 December, 2014

While the grocery market has returned to very slight growth, real grocery deflation, which has seen prices fall by 0.7% versus last year, equates to savings of £182 million for consumers in the last three months, according to Kantar.

Kantar Worldpanel's most recent market report released yesterday for the 12 weeks ending on December 7 2014 show a very slight - 0.1% - return to growth.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "The market has returned to growth, only very slight growth, but sales are up 0.1% on a year ago. This is against the backdrop of even greater grocery price deflation. A typical basket of grocery now costing 0.7% less than it did last year. This might not sound like much but it does equate to shoppers savings £182 million over the last three months."

The deflation of the price of grocery goods continues as retailers try to lure more customers into shops for the peak Christmas trading times.

"An increase in the money spent on promotions points to the fierce ongoing price war, with the large mainstream supermarkets battling to stem their market share losses. Interestingly this month we have seen a slight 1.5% increase in volumes - possibly a sign of shoppers reacting to some of the deals available or possibly the start of the Christmas spending spree," said McKevitt.

The winners once again in the price wars are Aldi and Lidl according to the Kantar figures but growth is slowing, although both retailers still had incredibly healthy double digit growth in the last three months.

McKevitt said: "Aldi once again led the retailer pack growing sales by 22%. This is their slowest growth since December 2011, hardly a reason for competitors to celebrate. But it is a definite indication that the years of 20 and 30% growth are drawing to a close. Lidl followed closely behind, growing 18%. Taken together, the German-discounters reached a record market share of 8.6%, up 1.5% points in only a year. The increase is being driven through attracting ever more shoppers. Nearly 55% of British households have visited an Aldi or a Lidl in the last three months."

Waitrose traditionally does well over the Christmas period as some consumers decide to trade up for the the big meals through the holidays and into the New Year, said McKevitt, and it looks like Christmas 2014 is shaping up in the same way.

He said: "The market isn't only about price though. With Waitrose growing sales by 8% proving there is a consumer appetite for something different, particularly as Christmas approaches when we have traditionally seen an increase of Waitrose share as some shoppers choose to trade up."

The big four continue to fight for scraps and are seeing falling market shares.

"If the discounter story is familiar, so too is the result for the big four, with all growing behind the market and losing share. Asda continues to be the best performing of the four but even they are not immune from the market conditions and saw sales fall by 1%. No good news for Tesco either where sales fell below 2.7%, which on an optimistic view is their best number since June. Sales also fell at Sainsbury's - down 1.8% - and Morrisions down 3.2%," said McKevitt.

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