UK supermarkets take a hit as shoppers switch to discount retailers
12 Feb 2014
The UK's leading supermarkets could be the victim of ''anti-corporatism'' with shoppers fast switching to discount retailers and Waitrose, according to an analyst.
According to new data published by Kantar Worldpanel yesterday, grocery sales in the UK grew at the slowest rate for nine years over the last 12 weeks - with Tesco, Morrisons and Asda hurt the most from the slowdown.
Data for just the last four weeks that The Telegraph claimed to have seen, showed that the ''big four'' grocers, including Sainsbury's, had been through even worse trading since Christmas.
The four weeks saw Tesco sales fall 0.8 per cent to 2 February, while Asda was down 0.7 per cent and the Co-operative 1 per cent. Sainsbury's sales were up just 0.1 per cent as against, 6.7 per cent in the previous four weeks.
The worst performer, though was Morrisons, which was down by 4 per cent during the four weeks.
The newspaper quoted Clive Black, analyst at Shore Capital, as saying the Yorkshire-based supermarket's performance was a ''major cause for concern'' adding it could lead to a profits warning.
He further warned that the sales data highlighted ''the question of anti-corporatism towards the major players''.
He asked whether this was a collective weakness because of an antipathy to large stores that predominated amongst the 'big four', was it about their propositions, promotions and prices, or whether there was a collective distrust and disconnection with the dominant brands that was leading consumers elsewhere.
Meanwhile, according to Fraser McKevitt, retail analyst at Kantar, grocery market growth slipped slightly indicating that brighter economic prospects were yet to be seen in the nation's shopping trolleys.
He added, the slowest industry growth since 2005 made it hard for many of the biggest retailers to increase sales.
Growth leaders Aldi and Lidl, continued to eat the lunch of rivals with market shares up 32 per cent and 17.2 per cent respectively.
The independent frozen foods store chain, Farm Foods, too notched up impressive growth – the fastest in the market at 43.9 per cent.
Sainsbury's, the only one of the major grocers increased market share, but it was placed at the third place behind Asda, according to Kantar's figures.
The Guardian quoted Richard Clarke, an analyst at Bernstein, as saying Sainsbury's continued to stand out from its rivals. He added, the figures showed that Morrisons had lost its way.
He said, it used to be a retailer which stood for good value and fresh food credentials, but it now exhibited neither value nor quality and neede a new study to be able to survive in the market.
