Its a funny old world when grocery market watchers are full
of smiles when Tesco manages to grow by 0.3% in the 12 weeks to 1st
February 2015, but signal gloom because discounters Aldi and Lidl “only” grew
by 21% and 14% over the same period. (Kantar Worldpanel)
It depends where the start point is of course and a move
into positive growth for Tesco after months of dropping sales probably does
seem like a turning point. Equally, when a company has been growing by over 30%
year on year as is the case with Aldi, then a slow down to 21% may seem like a
turning point too.
What is clear though is that there is no sign of a rush back
to traditional mainstream shopping patterns. Sainsbury's sales are declining by 1% and Asda by 1.7%, and the evidence suggests that the
march of the discount grocers is likely to continue, albeit at slightly lower
growth rates.
Take for example Aldi’s stated plans. They have committed to
opening 70 more stores in 2015, and one of these will be its biggest ever, at 19,0000
sq feet compared with an average of 16,000 sq ft just now. More stores mean
more shoppers, and bigger stores with their capacity to offer a wider range may
mean a bigger spend per shopper.
There is no doubt that increasing numbers of us go to discounters.
The IGD says that 55% of shoppers visited a discounter in December 2014 versus
36% in December 2010. This could be due to well publicised offers on alcohol,
but there are also signs that increasing numbers are using discounters to do
their main shop – 15% in December 2014 versus 3% in December 2010. And shoppers
seem to like what they find when they get there - 52% of those visiting a
discount shop spend over half their food and grocery shopping budget there.
Whilst it is the retailers who tend to get the headlines, the
changing shape of the grocery market continues to cause headaches for suppliers.
There are the well documented demands for reduced prices and extended payment
terms from the big 4 mainstream grocers, and in a total grocery market which is
growing by just over 1% the demands are rarely compensated for by growth. The
problems then deepen, as the discount sector which is showing growth, tends not
to stock brands, and buys most of its product lines from abroad.
