Sainsbury's Withstands Discount Onslaught As Competitors Struggle
Sainsbury's was the only one of the UK’s largest four supermarkets to increase sales in the last 12 weeks, as an expansion of its convenience-store business helped it withstand the onslaught of the discount grocers.
Market-leader Tesco, Asda and Morrisons all saw their sales fall as German budget chains Aldi and Lidl maintained a push that has seen them grab almost 10 per cent of grocery spending, researcher Kantar Worldpanel said in its monthly report.
Sainsbury’s sales rose 0.9 per cent in the period ended 13 September, matching the pace of growth for the wider industry. The grocer attracted 250,000 new shoppers and held its share at 16.2 per cent, according to Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
The growth of convenience shopping has benefited Sainsbury's, while weighing on competitors lacking much of a presence in that area. This month, Morrisons agreed to sell almost all of its small-store business after failing to turn a profit. Sales at the Bradford, England-based company fell 1.4 per cent in the 12 weeks, Kantar said. Asda, which also doesn’t have a significant convenience business, again trailed its peers with a 2.9-per-cent decline in revenue.
Tesco’s sales dropped 1 per cent, while Aldi and Lidl posted growth of 17 per cent and 16 per cent, respectively, Kantar said. Lidl has about 620 stores in the UK and plans to almost double that number.
As supermarkets continued to struggle to attract shoppers into larger stores, online sales rose by 12 per cent and now account for almost 7 per cent of total grocery revenue, Kantar said.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.