Shoppers switch stores as income patterns change

Some of the UK’s biggest grocers lost market share to cheaper rivals in the last three months as household incomes came under further pressure, according to this useful article in the Guardian

Tesco and Asda, Britain’s number one and two grocers lost market share in the late summer to early autumn, while discount-focused retailers Aldi, Lidl and Iceland all increased their hold.  The shift came as Tesco finalised plans to cut the cost of 3,000 everyday products under its Big Price Drop campaign, to which third-place competitor Sainsbury’s responded with its Brand Match scheme. Tesco’s £500m campaign was launched shortly before the UK’s top grocery retailer revealed its worst sales performance in two decades.  Asda fired back with a price cut at the petrol pumps, while Sainsbury’s scheme gives shoppers a refund coupon at the till if branded products are cheaper at its larger rivals.

So you don’t need to be an expert to see the trend; but according to one market research analyst, a “low-price message is the driving force in the market”.

What’s extra interesting is that this ‘trading down’ in the market is matched by ‘trading up’ elsewhere as noted here.

This “two-nation” effect has continued, with higher end supermarket Waitrose growing sales by 9.4% and the premium ranges at both Tesco and Sainsbury’s showing double-digit growth.
Current market share figures:

• Tesco’s market share dipped from 30.9% a year ago to 30.6% today
• Asda’s fell from 17.8% to 17.1%
• Sainsbury’s held share at 15.9%
• Morrisons edged higher, from 11.5% to 11.6%.
• Aldi increased its share from 3% to 3.5%
• Lidl was up from 2.4% to 2.5%
• Iceland moved higher from 1.7% to 1.8%

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