Grocery market in decline for first time in 20 years as supermarket price war rages

The ongoing price battle between the Big Four supermarkets and discounters like Aldi and Lidl has seen the grocery market has fall into decline for the first time in two decades, according to figures from Kantar Worldpanel.

For the 12 weeks ending 9 November 2014 sales were down 0.2 per cent compared with this time last year.

While Aldi achieved a record high market share of 4.9 per cent, and saw sales rocket 25.5 per cent higher than last year and Lidl’s 16.8 per cent boost in sales brought its market share to 3.5 per cent, Sainsbury’s and Morrisons both recorded a decline in share compared with last year with sales down 2.5 per cent and 3.3 per cent respectively.

Asda recorded the best performance among the big four and held its 17.2 per cent market share.

Tesco’s sales suffered the greatest drop, down by 3.7 per cent, however the rate at which it is losing market share has slowed.

Meanwhile, Waitrose has grown sales by 5.6 per cent to take a 5.1 per cent share of the market.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said the declining grocery market is of particular concern to retailers in the lead up to the Christmas trading period.

“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 per cent 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,” he added.

Signalling the impact of Aldi and Lidl on inflation, the grocery market seen its fourteenth successive fall and now stands at -0.4 per cent for the 12 week period ending 9 November 2014 – another record low since Kantar Worldpanel began recording GPI in October 2006.

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