Supermarket price cuts leave UK market growth at 11-year low-Kantar

Wed May 7, 2014 5:32am EDT

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LONDON, May 7 (Reuters) - Rising pressure on Britain's big
four grocers to slash prices in the face of competition from
discount chains has led to the lowest growth in the grocery
market for 11 years, according to industry data released on
Wednesday.
    A report by market researcher Kantar Worldpanel showed the
UK grocery market continuing to polarise, with the big four -
Tesco, Asda, Sainsbury's and Morrisons
 - being squeezed between discounters Aldi 
and Lidl and upmarket players such as Waitrose
.
    Earlier on Wednesday, Sainsbury's posted its slowest annual
profit growth in nearly a decade. 
    As British consumers shop around to save money, Tesco, Asda
and Morrisons have all been cutting prices to try to combat the
allure of discounters. Just last week, Morrisons offered
reductions averaging 17 percent on 1,200 products.
    "Lower prices across the board are great for shoppers, but
have driven down market growth to its lowest level in 11 years,"
Kantar director Edward Garner said. Some 45 percent of the sales
of the big four came from products being offered at a reduced
price, he said, compared with just 3 percent at Aldi.
    Kantar said Aldi's sales grew at a record-high 36.1 percent
year-on-year in the 12 weeks to April 27, taking its market
share to a record 4.7 percent. Lidl's sales rose 20.9 percent,
its highest growth since August 2004, giving it a record 3.5
percent share. Waitrose's market share also hit a record at 5.1
percent.
    Among the big four, Asda proved the most resilient, holding
its 17.3 percent market share and narrowly beating overall
market growth of 1.9 percent with a 2.0 percent sales rise.
    Tesco, Sainsbury's and Morrisons all suffered declines in
market share. Tesco and Morrisons also recorded a fall in actual
sales, down 2.4 percent and 3.6 percent respectively.
    Kantar said grocery inflation was 1.5 percent for the 12
week period - the lowest level since June 2010.
    
    Market share and sales (percent) 
                  12 wks to     12 wks to     pct change
                  Apr 27, 2014  Apr 28, 2013  in sales
 Tesco            28.7          30.0          -2.4
 Asda             17.3          17.3           2.0
 Sainsbury        16.6          16.8           0.3
 Morrison         11.0          11.6          -3.6
 Co-operative      6.1           6.2           0.1
 Waitrose          5.1           4.9           6.3
 Aldi              4.7           3.5          36.1
 Lidl              3.5           3.0          20.9
 Iceland           2.1           2.0           3.6
 
 (Reporting by Neil Maidment; Editing by Larry King)
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