The UK grocery market has become a major battleground in recent months as the major supermarket operators continue to lose ground to the discounters. According to IGD, this trend is set to continue in the next five years and ‘convenience’ and ‘online’ shopping will also continue to chip away at the previously dominant supermarket and hypermarket formats.
2014 may prove to be something of a watershed in the UK grocery market as research points to the emergence of increasing numbers of more savvy and promiscuous food shoppers, according to a recent report from consultancy, 'Shoppercentric'
In the short term, the overall grocery marketplace is described as 'depressed' by most pundits and is locked into a 'price war' , in which the discounters are emerging as clear winners.
Data from Kantar Worldpanel suggests that Aldi and Lidl continue to dramatically outperform the market with growth rates of 35% and 22% respectively. Waitrose are performing well at the top end, Sainsbury and Asda are holding ground but Tesco and Morrisons are struggling to keep pace.
However, the market was largely taken aback by the news that Tesco CEO, David Clarke, would be leaving the company following a fresh profits warning.
Aldi and Lidl are not just winning the numbers game, as, according to researchers YouGov, their 'BrandIndex' survey suggests that both are also trumping the majors in terms of public perception.
The recent news of a joint venture between Sainsbury and Netto won significant praise in the media, as it will allow Sainsbury expertise to help build the Netto presence in the rapidly growing discount sector without undermining Sainsbury’s own established brand values.
Netto sold their UK business (193 stores) to Asda-Walmart in 2010 and they were all converted to the Asda fascia. The initial plan is to open 15 stores by the end of 2015 and, if successful, the project will be rolled out further.
A recent IGD (Institute of Grocery Distribution) report 'The next five years : how the grocery market will evolve' suggests that there are some discernible longer term trends already in place in the UK grocery market. They forecast that the ‘convenience’ format will increase its share from 21% to 24%, ‘discounters’ will grow from 6% to 11% and ‘online’ sales will double from 4% to 8%.