Fresh market share figures for the UK grocery sector show strong gains for discounters Aldi and Lidl as consumer budgets are squeezed by inflation.

Aldi and Lidl saw sales rise by 28% and 10% respectively in the 12 weeks to 20 January, helping them to chalk up market share gains in a tough UK grocery market, according to the latest figures from Kantar Worldpanel.

If horse DNA in beef burgers is set to affect shoppers' loyalty to the key retailers involved - Aldi, Lidl, Iceland and Tesco - there was little sign of it by the end of Kantar's reporting period.

Tesco, it said, maintained its market share and matched market sales growth for the first time since June 2011. Iceland, meanwhile, held on to its record market share of 2.2%, first achieved in Kantar's last reporting period.

"These positive results are a sign of stabilisation for Tesco as the retailer gets back on track with its customers," said Edward Garner, director at Kantar.

In a sign of a growing schism between premium and value in the sector, Kantar also pinpointed 8% year-on-year sales growth for Waitrose in the 12 weeks.

Morrisons was the clear loser in the period, it said, "suffering a drop in sales and a share decline of 0.6 percentage points".

Kantar underlined that, with grocery price inflation running at close to 5%, "there is a heightened need for retailers to deliver value for money to customers".

Show the press release

The latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 20 January, show Tesco maintaining its market share and matching market growth for the first time since June 2011.

Edward Garner, director at Kantar Worldpanel, explains: “These positive results are a sign of stabilisation for Tesco as the retailer gets back on track with its customers. However, this improvement has put some pressure on the rest of the big four with Morrisons in particular suffering a drop in sales and a share decline of 0.6 percentage points in the latest period.”

The strongest growth recorded during this latest period is at the discount and premium ends of the market. The Waitrose figures echo the record Christmas it reported, with strong year-on-year growth of 8%.

Meanwhile, the discount outlets, and Aldi in particular, lead the way in the first stage of 2013 – strongly out-performing the market with growth rates of 28.2% for Aldi and 10% for Lidl. Iceland holds on to the record 2.2% share reported last period.

Edward Garner continues: “It is worth noting the improved performance from The Co-operative this month, with the retailer recording a sales increase of 0.9%. This growth contrasts with the declines posted throughout 2012 and could be a positive step for the grocer.”

The widening gap between market growth, currently at 3.3%, and grocery price inflation (4.9%) is causing a squeeze on shopping budgets. As a result, there is a heightened need for retailers to deliver value for money to customers.

An update on inflation

Grocery inflation stands at 4.9%* for the 12 week period ending 20 January 2013. This is an increase on the 4.5% reported last period and continues a rising trend since September last year.

*This figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers and therefore represents the most authoritative figure currently available. It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods – shoppers are likely to achieve a lower personal inflation rate if they trade down or seek out more offers.

Original source: http://www.kantarworldpanel.com/en/Press-Releases/Grocery-Market-Share-UK---A-Stronger-Tesco