Discounters continue to increase market share, Kantar says

Improved weather spurred shoppers to open up their wallets, leading to the largest acceleration in consumer spend on groceries since early 2016, according to the results of the most widely-followed figures on the sector's health.

The overall market grew by 0.3% over the 12 weeks ending on 14 August to reach £25.04bn, according to Kantar Worldpanel, marking the biggest acceleration since March 2016.

Over the same period, promotional sales fell to their lowest since September 2010, as the major retailers continued to shift towards simpler pricing models.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Only 37.7% of grocery sales were bought on any kind of promotion this period – a significant decrease from highs of over 40% we were seeing in 2015. Fewer promotions doesn’t mean consumers are paying more for their shopping but does reflect the renewed focus on own-label lines which is visible across the market."

"There remains no evidence of Brexit-fuelled inflation causing food prices to rise. In fact, grocery price inflation remains negative, with a representative basket of goods 1.3% cheaper than it was last year."

A light at the end of the tunnel for Tesco?

Discounters continued to see the fastest growth, with sales at Lidl up by 12.2% and by another 10.4% at Aldi.

Lidl increased its share of the market in comparison to a year ago by 0.4 percentage points to 4.5% and Aldi by 0.6 percentage points to 6.2%.

On the other extreme, Asda saw sales drop by 5.5%, unchanged from the previous month's tally.

Sales at Tesco dropped 0.4%, their slowest rate of decline in six months, while its share of the market dipped from 28.3% to 28.1%.

McKevitt said the drop in Tesco's sales - stretching back to March 2015 - might be about to hit bottom, with the grocer possibly returning to growth in 2016.

"Tesco’s recent product launches have been making a positive impact on its performance, with its ‘Farm brands’ finding their way into over a quarter of the Tesco baskets this period.”

Sales shrank at Sainsbury’s by 0.6% and at Morrisons by 1.8%, leaving the retailers with market shares of 16.1% (from 16.3%) and 10.6% (from 10.8%), respectively.

Waitrose's market share was unchanged at 5.1%, with sales higher by 1.4%.