Asda gets hit the hardest as supermarket price wars continue

ASDA have been hit the hardest in the latest figures from Kantar Worldpanel.

The Leeds-based grocer’s sales fell by 3%, bringing its market share down to 16.6%.

This follows an announcement this week that Asda would be concentrating on its core business, that will result in head office job cuts and a slowdown in its click-and-collect plans.

The Leeds-headquartered supermarket group has launched Project Renewal – a name it first used in the early 1990s during a period which re-energised the business – and the new 18-month programme is designed to reverse its falling sales.

Sales at Yorkshire’s other supermarket Morrisons fell by 1%, but they had improved on their market share in the last quarter.

The figures, for the 12 weeks ending 11 October 2015, have shown that overall supermarket sales growth is up by 0.8% compared to the same period last year.

Morrisons and Asda growth trajectory Oct 2005 – Oct 2015

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “With like-for-like grocery prices 1.7% lower than last year, the supermarket price war shows no signs of abating.

“Consumers have now enjoyed more than 12 months of continually falling prices and are currently pocketing these benefits rather than splashing out on substantially more grocery items, with overall volume growth of only 2%. This equates to £1.5 billion taken out of the market in the last year, saving each household £58 on average.”

Sainsbury’s was the only one of the larger supermarkets to see sales growth this period, and a strong performance in its online and Local stores helped it to increase revenues by 1.1%, though market share was static at 16.1%.

Sales fell at Tesco by 1.7%, though it is too early to see the impact of its revamped ‘Brand Guarantee’ initiative.

In contrast to the overall market, online grocery sales have increased by 9.8% on last year.

 Supermarkets have a chance to capitalise on this growth, with less than a fifth of households currently shopping online.

Fraser McKevitt continues: “Internet sales offer a chance of long term growth – only 18% of households bought groceries online in the last 12 weeks meaning there’s plenty of space for further expansion.

“The convenience factor and minimum spend restrictions mean online baskets tend to be larger, averaging £67 in value, compared with £14 for the average bricks and mortar trip.

“Amazon Fresh’s expected full launch early next year could be a major disruptor, bringing down average basket sizes, accommodating on demand shopping, and accelerating the growth of the whole online market.”

After a slowdown earlier this year, discounters Lidl and Aldi have both seen their rate of growth return to above 17% during this period. with Lidl now claiming 4.3% of the market and Aldi, are reporting that revenues are up 17.6% on a year ago.

There has been further success this period for Waitrose, up by 2.1%; the Co-operative, where sales grew by 1.0% and Iceland, growing for the sixth month in a row and increasing sales by 3.2.