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March 30, 2010

UK: Slowing inflation hits sales at UK grocers – Kantar

Sales among the UK's major retailers grew by 3.6% in the 12 weeks to 21 March but slowing food inflation has weighed on growth, according to the latest data from Kantar Worldpanel.

Sales among the UK’s major retailers grew by 3.6% in the 12 weeks to 21 March but slowing food inflation has weighed on growth, according to the latest data from Kantar Worldpanel.

Food inflation stood at 1.8% in March – compared to 9.1% in March 2009 – and depressed sales growth among UK grocers, Kantar said.

The overall year-on-year growth for all the UK’s major retailers dropped to a “pre-recession low” of 3.6%, the Kantar figures showed.

Fraser McKevitt, retail analyst at Kantar Worldpanel, said: “We can see the dramatic fall in inflation by comparing this month’s figure to March 2009 when inflation was running at 9.1%. While this has had a dampening effect on retailer growth, lower inflation brings benefits to consumers and the latest figures suggest that shoppers are taking advantage of slower grocery price increases by trading up to more expensive lines such as Tesco Finest.”

Tesco, the UK’s largest grocer, grew its share of sales by 0.2% as sales climbed 4.1%. However, the company’s nearest rival, Asda, lost some of the market year-on-year. Asda’s sales rose 2.7% but its share eroded by 0.2%.

Morrisons’ sales climbed 7.8% and saw its share of the market improve 0.5%. Sainsbury’s saw sales rise 4.6% and eked out a 0.2% increase in market share, although Kantar said the figure could be “partially attributed” to store expansion.

Waitrose’s sales jumped 14.1% on the year, boosting its market share by 0.3%, while the discounters “languished behind the market”, with Aldi and Lidl losing share.

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