UK: Falling inflation brings growth challenge - TNS

The UK grocery market growth rate is continuing to fall back as food inflation moderates, according to TNS.

The latest TNS Worldpanel grocery market share figures, published today (13 October), showed that growth will be more challenging in the months ahead, without the "flattering" effect of inflation.

Ed Garner, director of TNS Worldpanel, said: "As far as individual retailers are concerned, this means that the gap between their growth rate and the market assumes more importance than growth on its own. For Tesco, whose growth had lagged the market for most of the past year, this gap has all but disappeared meaning that their share has now stabilised around the 31% mark."

Garner added that Asda, Sainsbury's and Morrisons have all seen their growth fall back from the last period measued by TNS but, in each case, the retailers have added market share as their growths have been higher than the overall market. 

"Morrisons shows the strongest growth of the top four as its share lifts from 11% to 11.5% and the business becomes more nationwide with particular emphasis on younger ABC1 households," Garner said.

"Waitrose growth of 11.6% is the highest since August 2006 with the Essentials range and newly acquired space continuing to drive the business forward. The Co-operative growth continues to exceed the overall market as the positive effects of the Somerfield acquisition feed through.

However, while Aldi and Lidl continue to see share growth, Garner said it has considerably attenuated from 2008 levels - total hard discounters have seen a modest share increase from 6.0% a year ago to 6.1% now.
 
He added: "Grocery price inflation has further decreased since last month and the figure for the 12-week-ending period 4 October 2009 is 3.5%. This is the seventh successive drop in grocery price inflation in this series of reports. As always, it is also important to remember that the drop in inflation does not mean that prices are falling, merely rising more slowly."