Morrisons leads rivals as discounters dent big four

Morrisons have bucked the trend among the big four. Picture: PA
Morrisons have bucked the trend among the big four. Picture: PA
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Supermarket chain Morrisons has continued to outperform its rivals, emerging as the only “big four” grocer to enjoy a rise in sales for the past three months.

Figures from market researcher Kantar Worldpanel showed the overall market has slipped back into decline, with spending down 0.1 per cent during the 12 weeks to 21 June compared with a year earlier.

Groceries are now 1.7 per cent cheaper than a year ago, and have been falling since September, but Kantar said the rate of decline is slowing and prices are projected to rise again before the end of the year.

Takings at Morrisons grew by 0.6 per cent, marking an acceleration on the modest 0.1 per cent increase seen in the previous 12-week period, when all of the UK’s other major chains headed in the opposite direction.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said the Bradford-based retailer increased its market share to 11 per cent – up 0.1 percentage points on last year.

He said: “While only a small increase against a weak 2014, this does represent the first market share gains made by Morrisons since December 2011.”

In comparison, market leader Tesco saw its sales fall 1.3 per cent during the past three months, as did rival Sainsbury’s, which is battling with US-owned Asda for second place. At Asda, sales slid by 3.5 per cent, leaving it with a market share of 16.5 per cent, in line with Sainsbury’s and down from 17.1 per cent a year ago.

All of the UK’s big four supermarkets are under pressure from discount grocers Aldi and Lidl, which are continuing to win cost-conscious shoppers away from their established rivals.

Aldi now commands a record 5.5 per cent slice of the market, having seen its sales soar 15.4 per cent in the 12 weeks to 21 June, while fellow German firm Lidl grew takings by 9.1 per cent, lifting its share to 3.9 per cent.

At the other end of the market, employee-owned Waitrose also grew ahead of the wider grocery sector, with sales up by 1.2 per cent, while takings at the Co-operative were unchanged compared with last year.

McKevitt said: “Last seen in November, the return to marginal decline across the grocery market reflects both falling prices and only steady volume growth. Sales volumes are up 2 per cent compared to a year ago but are not anticipated to accelerate, even with an improving economy, as demand for groceries has remained broadly steady since before the recession.”

Falling prices reflect the sector’s response to the rise of Aldi and Lidl, as well as deflation in key categories such as eggs, butter and bread, Kantar said.