Morrisons continues to struggle in supermarket squeeze

MORRISONS’ market share has taken another beating as new figures showed it was the worst-performing of the big supermarkets in the last three months.

Sales at the Bradford-headquartered retailer was down 3.2% for the 12 weeks to December 7, as discount retailers Aldi and Lidl continued to record strong growth. Morrisons’ West Yorkshire rival, Asda, was the best perfoming of the traditional big four, losing 1.0% during the period with Sainsbury’s and Tesco falling by 1.8% and 2.7% respectively.

The latest grocery share figures from Kantar Worldpanel show that despite falling prices, the grocery market has returned to marginal growth of 0.1%, after last period’s historic first ever recorded decline. This is attributed to shoppers putting slightly more in their baskets compared with the same time last year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Britain’s supermarket price war is ramping up ahead of the all-important Christmas period. Retailers are selling more items on promotion, leading to like-for-like prices falling by 0.7% compared with this time last year.

“Cheaper groceries are an early Christmas present for shoppers, saving them £182m in the past 12 weeks alone but this puts pressure on the supermarkets. We expect grocery deflation to continue well into 2015 as the price war rumbles on.

“At the discount end of the market the two German retailers Aldi and Lidl have reached a record combined market share this period with 8.6% of the market, up 1.5 percentage points over the past year. Aldi recorded the fastest growing sales of any retailer at 22.3% and is followed closely behind by Lidl with 18.3% sales growth.”

Asda’s sales dipped by 1.0% taking its share down to 16.7% however it did record the best performance among the big four. Tesco’s sales slowed by 2.7% in the latest 12 week period. This is its best result since June, showing some limited signs of stabilisation for the retailer. Meanwhile, Sainsbury’s and Morrisons both lost share, with sales dipping by 1.8% and 3.2% respectively.

The supermarket sector has been in a state of change over the last few years with the emergence of the Aldi and Lidl and the weakening of Tesco’s dominance.

The big four now account for 73.5% of the market – Tesco’s has 29.1%, followed by Asda with 16.7%, Sainsbury’s with 16.5% and Morrisons with 11.2% – although Aldi and Lidl continue to disrupt the marketplace and attract an increasing share for themselves.