Shoppers are trading down to cheaper products as growth in the grocery market remains below inflation.
The latest figures from Kantar Worldpanel reveal that although the grocery market grew at 5.1 per cent for the 12 weeks ending 2 October, it is still below grocery price inflation, which stands at 5.7 per cent.
“The gap between inflation and growth has become a major factor of the grocery market as shoppers trade down to cheaper products and retailers strive to convince consumers they are combating inflation,” said Ed Garner, director at Kantar Worldpanel.
Retailers with a “low price message are the driving force in the market” with Iceland and Lidl enjoying sales growth of over 10 per cent year-on-year, and Aldi leading the market with 25.1 per cent growth, according to Kantar Worldpanel data for the 12 weeks ending 2 October.
Last week, Aldi filed an operating profit of £18.7 million for 2010 - up from a £21.2m loss in 2009 - on the strength of an annual sales increase of 4.6 per cent to £2.1 billion.
Morrisons continues to be strongest performer among the big four although the impact of Tesco’s Big Price Drop and Sainsbury’s Brand Match will not be felt until the next period.
Meanwhile, Asda has held share at 17.1 per cent for the 12 week period in a change from the declines of recent periods. This is partly as a result of the inclusion of converted Netto stores in its figures.
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