Frugality: Discount Supermarkets Gain U.K. Grocery Market Share (Update1)
By Louisa Nesbitt
Aug. 19 (Bloomberg) -- German discount retailers Aldi Group and Lidl won more of the U.K. grocery market in the last three months as Britons struggled with higher living expenses.
Aldi's share climbed 0.4 percentage point to 3 percent, while Lidl increased its portion of the market by 0.1 percentage point to 2.4 percent in the 12 weeks ended Aug. 10, compared with a year earlier, London-based researcher Taylor Nelson Sofres Plc said today.
Iceland Foods Ltd. also raised its share, while market leader Tesco Plc and no. 3 J Sainsbury Plc slipped even as they cut prices to retain customers hurt by soaring food and energy costs. Essen-based Aldi, Germany's largest discounter, plans to win a tenth of the U.K. grocery market, the Economist magazine reported this month.
``Retailers with a clear price message are posting the strongest performances,'' Ed Garner, director of research at TNS Worldpanel, said in the researcher's statement. ``New discount shoppers are predominantly younger households with children,'' he said, adding that their budgets are coming under the strongest pressure.
Cheshunt, England-based Tesco saw its share of the market fall 0.2 percentage point to 31.6 percent during the 12 weeks, while Sainsbury lost 0.3 percentage point to 15.8 percent, TNS said. Wal-Mart Stores Inc.'s Asda and William Morrison Supermarkets Plc both gained 0.2 percentage point to 17 percent and 11.1 percent, respectively, while Iceland added 0.1 percentage point to 1.7 percent.
Price Inflation
U.K. retailers are facing the toughest business conditions in about three decades, the British Retail Consortium said last month. Prices at grocery stores rose 6.8 percent for the 12 weeks ended July 13, according to TNS.
Separate grocery market data from research company Nielsen showed Iceland had sales growth of 13 percent during the last quarter, compared with a year earlier. Almost 40 percent of households shopped at a discount retail store in the 12 weeks to Aug. 9, it said in an e-mailed statement.
The Nielsen research showed the last four weeks were ``awful'' for Marks & Spencer Group Plc, analyst Nick Bubb at Pali International Ltd. in London said in a note today. A sales drop of about 2.1 percent for Marks during the period indicates same-store sales declined about 8 percent, according to Bubb, who rates the stock a ``sell.''
``The premium or quality food operators have suffered disproportionately,'' while discounters ``did well,'' he wrote.
To contact the reporter on this story: Louisa Nesbitt in Dublin at lnesbitt@bloomberg.net |
