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Big supermarkets slip as discounters make ground

Aldi Port Glasgow

Aldi opening in Port Glasgow: the chain was a big winner in the last figures

Co-op, Aldi and Lidl have made further gains in the supermarket sector at the expense of three of the big four.

Tesco, Sainsbury’s and Asda all saw their share of the grocery market fall in the 12 weeks to 7 October, compared to the 12 weeks to 8 October, according to the latest figures from Kantar Worldpanel.

Despite recent figures showing the turnaround beginning to work, Tesco’s share fell from 28% to 27.4%. Sainsbury’s was down from 15.8% to 15.4% while its proposed merger partner Asda was down from 15.5% to 15.3%. Morrisons held steady at 10.3%.

Aldi and Lidl were bother risers. Aldi made a big leap, up from 6.8% to 7.6% and Lidl rose from 5.2% to 5.6%.

Co-op grew market share over the quarter, increasing its portion from 6.2% to 6.4%. It reported a 7% rise in sales over the period, suggesting investment in stores and a revised loyalty scheme was paying off, said Russ Mould, investment director at AJ Bell.

Morrisons sales were 2.4% higher, albeit still lagging the pace at Aldi (+15.1%) and Lidl (+10%).

“Supermarkets are challenged with trying to drive up sales volumes without diluting profit margins too much through price cuts and promotions,” said Mr Mould.

“We’re now heading into the all-important Christmas period where supermarkets go all out to try to get one up on the competition with big offers and new products. As such, Tesco’s board may not be best pleased with its momentum going into the seasonal push.

“The latest 12 week figures show a 0.6% percentage point decline in Tesco’s market share to 27.4% and only a 0.9% rise in sales. The result is somewhat surprising given how much publicity Tesco generated with its Jack’s discount concept launch in late-September.

“Countless column inches and air time drew attention to the broader Tesco group as well as Jack’s and should have acted as free advertising to help get more people into its stores.

“Less surprising is Sainsbury’s mere 0.6% sales growth over the latest 12 week period. The business has been having major issues with stock availability in its stores with countless pictures on social media showing empty shelves, meaning shoppers visiting its stores weren’t able to buy everything they wanted.

“That’s an awful situation given the wealth of competitors who would be happy to cater for these shoppers.

“Sainsbury’s next set of financial results are out on 8 November and shareholders and customers are going to want answers as to why so many shelves are bare.”

Overall supermarket sales rose 3.2​%​ compared ​with​ the same 12 weeks last year. ​Alt​hough this is a slight slowdown from the highs reached during 2018’s hot summer, sales are above 3%​ for the fourth period in a row and well ahead of the average market growth rate over the past five years​ of​ 1.7​%.

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