Britain's overall grocery market growth was slightly higher at 1.7% in the 12 weeks to January 27th than the 1.6% growth we saw over the Christmas period, according to the latest data from Kantar Worldpanel.
Sales declined by £1.5bn from December, however this was expected as shoppers made the inevitable cut backs after Christmas. Inflation remained the same at 1.3%, implying a small amount of growth in volume.
Changing shopper preferences
January's growth was driven by the strong performance of fresh produce. This came at no surprise after retailers fully embraced the Veganuary trend this year. The industry is responding to the changing shopper preferences for more specialist diets by promoting a more plant-based diet. Our stand-out executions of Veganuary can be found here.
This was a continuation from the growing health-based trends we saw in 2018. One in three shoppers now say they are interested in or are following a vegetarian diet and one in six a vegan diet. Subscribers can find out more about these trends in our UK retail and shopper trends Q1 2019 report.
Dry January affected alcohol sales over the period, showing shoppers are continually looking for ways to be healthier. Although sales of alcohol were +10%, this was driven by a very strong new years eve. If this day was taken out spending would be -2.9%.
Discounters continue to grow
Discounters continue to perform well with Aldi leading the way as the fastest growing retailer at +9.1% sales growth. This pushed its market share up to 7.5% from 7.0% a year ago. Kantar has shown that the average spend in discounters is rising. In the previous 12 weeks it has risen £8 to £204. We expect this growth to continue as shoppers remain budget conscious in the new year period.
Tesco fastest growth since September
Tesco's growth was the best of the big four at 1%, an encouraging result for the retailer as it enters its centenary year. However, Tesco remains a business under pressure as evidenced by last week's announcement to reduce staffing at counters as part of its drive to become more competitive.
Continued good performance from Co-op
The Co-op achieved good growth over the Christmas period of 3.2%. This positive performance continue in January with growth of 3.5%. It was the only non-discounter to gain market share, increasing to 5.9%. The retailer is capitalising on its good run of performance, investing in its estate with plans to open 100 stores in 2019.
Other good performances
After 11 successive periods of growth Iceland's positive performance continues as it grows 2.3%.
Asda saw double digit growth in its online sales, contributing to its growth of 0.7%. More details of this will be available when the retailer releases its full results on February 19th. Its market share did however decline 0.2% to 15.3%. The CMA is also likely to reveal whether and on what terms its acquisition by Sainsbury’s can go ahead later this month.
Waitrose saw better results after a disappointing Christmas of slow growth at 0.2%. We have recently seen the retailer continue to make changes to its senior management team. Going forwards it is focusing on differentiating its product proposition to improve results.
12 weeks to 28 Jan 2018 (% share)
12 weeks to 27 Jan 2019 (% share)
Sales growth (Y-o-Y %)
|Waitrose & Partners
|Total symbols & independents
Source: Kantar Worldpanel
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