The price of groceries in the UK is growing at its most sluggish speed since 2006, owing largely to intense price warfare initiated by Lidl and Aldi, the great European discounters.
The pace of sales for retailers in the grocery trade rose 2.8 per cent in the 12 weeks leading up to 22 June, while the rate of inflation stood at 0.8 per cent for this period. Fraser McKevitt, consumer insight consultant at Kantar, however, opined that the jump in sales was a result of when Easter fell this year. "Underlying, it's still a very soft market. The volume [of goods sold] is flat or growing only slowly, and there is an incredibly low inflation environment," he stated.
Both Sainsbury's and Asda were able to increase market share, though their single-digit pace of growth was far outshone by the discounters. The German chains Aldi and Lidl's sales rose by 35.4 per cent and 22.3 per cent, respectively, taking their share of the market to 8.3 per cent, while Scottish company Farmfoods achieved a 23.2-per-cent increase in sales.
Waitrose's improvement owes in part to the success of its online business. It sells groceries for home delivery via its own site, Waitrose.com, and Ocado, the online grocery specialist that revealed its first-ever half-year profit on Tuesday, following elevating sales.
© 2014 European Supermarket Magazine by Peter Donnelly
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